- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 7. Analysis of Long-Term Assets
- Subject 6. Depreciation Methods
CFA Practice Question
Which change needs to be applied retrospectively to the financial statements?
B. A company determines it must change the residual value of an asset from $2,000 to $3,000.
C. Neither of these changes should be applied retrospectively.
A. A company wants to change the useful life of an asset from 5 years to 7 years.
B. A company determines it must change the residual value of an asset from $2,000 to $3,000.
C. Neither of these changes should be applied retrospectively.
Correct Answer: C
These changes need to be made prospectively (going forward).
User Contributed Comments 4
| User | Comment |
|---|---|
| Yrazzaq88 | I believe the only change retrospectively, is if the company decided it wanted to change to Double Declining balance? No? |
| praj24 | no |
| xd2163 | Changing in accounting estimate only requires changes be applied prospectively |
| khalifa92 | retrospective changes are only associated with changes in accounting standards. |