DRS Corporation changed the way it depreciates its computers from the sum-of-the-year’s-digits method to the straight-line method beginning January 1, 2016. DRS also changed its estimated residual value used in computing depreciation for its office building. At the end of 2016, DRS changed the specific subsidiaries constituting the group of companies for which its consolidated financial statements are prepared. Required: 1. For each accounting change DRS undertook, indicate the type of change and how DRS should report the change. Be specific. 2. Why should companies disclose changes in accounting principles?
DRS Corporation changed the way it depreciates its computers from the sum-of-the-year’s-digits method to the straight-line method beginning January 1, 2016. DRS also changed its estimated residual value used in computing depreciation for its office building. At the end of 2016, DRS changed the specific subsidiaries constituting the group of companies for which its consolidated financial statements are prepared. Required: 1. For each accounting change DRS undertook, indicate the type of change and how DRS should report the change. Be specific. 2. Why should companies disclose changes in accounting principles?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.3DC
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DRS Corporation changed the way it depreciates its computers from the sum-of-the-year’s-digits method to the straight-line method beginning January 1, 2016. DRS also changed its estimated residual value used in computing
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