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Consider the following two independent scenarios: Scenario 1 : Fishtail Ltd has always measured its' manufacturing equipment using the cost basis in...

Consider the following two independent scenarios:


Scenario 1: Fishtail Ltd has always measured its' manufacturing equipment using the cost basis in accordance with AASB 116. In the current year, it decides the revaluation method will provide more relevant and reliable information to investors.

Scenario 2: Fishtail Ltd has always depreciated its' motor vehicle fleet using the straight-line method. In the current year, Fishtail decides that the diminishing value method will better reflect the consumption of the assets going forward.

 

REQUIRED

Which of the above scenarios is a change in accounting policy, and which is a change in accounting estimate? Describe the accounting for each scenario naming the affected accounts.

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