Suppose if a company changed its method of charging depreciation from SLM to WDV at the last day of the financial year so we give its retrospective effect, then my Question is:-
[1] What is the effect of machine which is sold DURING the year.
[2] What Is the effect for machine which is sold EARLIER.
[3] Machine which is in existence at the end, how to present its profit / Loss in Statement of Profit And Loss ??
Is it an exceptional item or other. Please Explain.
(1) & (2) The effect of change in method of depreciation need not be given for assets sold.
(3) In case of other assets, the depreciation for the curent year based on the new method needs to be shown under the head "depreciation", The amount of depreciation for the retrospective effect needs to be shown separetely under exceptional items in the profit & loss statement.
In addition, a detailed note in the notes to accounts also need to be incorporated.
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