Hi guys,
I remember one question that asked about an impact on the financial statements once the company changes its depreciation method. The answer said that the change in the method would impact the retained earnings and current accumulated depreciation, in consequence there would be in impact on the current’s year net income.
My question is when one changes the depreciation method, how this is treated in the financial statements? Would this trigger restatements?
Thanks
Ok, I’ve found the answer:
"Create an adjusting entry for each asset, adjusting the “Depreciation Expense” and correlating “Accumulated Depreciation” accounts. For example, changing from the straight-line method to the double-declining method would require a debit to “Depreciation Expense” and a credit to the asset’s “Accumulated Depreciation” account in the amount of the difference in the straight-line depreciation and the double-declining depreciation expense to date.
Read more: How to Report Change in Depreciation Method | eHow.com http://www.ehow.com/how_6833353_report-change-depreciation-method.html#ixzz1vaLjRUFN"