A company has been depreciating its it equipment over 5, Ask an Expert

Accounting

A company has been depreciating its IT equipment over 5 (five )years, but now finds that it is becoming obsolete in 3 years.

What does the consistency principle allow the company to do?

A. change depreciation policy to 3 years and highlight the effect of this in its financial statements

B. change depreciation policy to 3 years without indicating the effect on profits

C. continue to depreciate over 5 years according to the existing policy

D. continue to depreciate over 5 years but note that after 3 years the equipment will be obsolete

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9521695

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