Unformatted text preview: We do not restate prior years' financial statements to reflect the new estimate. Instead, we merely incorporate the new estimate in any related accounting determinations from there on. If the after-tax income effect of the change in estimate is material, the effect on net income and earnings per share must be disclosed in a note, along with the justification for the change. Depreciation for 2011 is $25,000: $300,000 Cost $ 50,000 Previous annual depreciation ($300,000 ÷ 6 years) x 2 years 100,000 Depreciation to date (2009-2010) 200,000 Book value __ ÷ 8 yrs. Estimated remaining life (10 years - 2 years) $ 25,000 New annual depreciation...
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- Spring '10
- Depreciation, Generally Accepted Accounting Principles, inventory method