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3. Which two of the following statements are correct concerning the depreciation of an item of property, plant and equipment? 1. An enterprise shall continue recognizing depreciation even if the new estimate of residual value exceeds asset's carrying amount. II. The residual value of an asset shall be reviewed periodically and if expectation differs from the previous estimate, the change shall be accounted for as a change in accounting estimate. III. The depreciation charge for each period shall be recognized in profit or loss unless it is included in the carrying amount of another asset. IV. A change in the depreciation method is treated by adjusting prior year's depreciation (1 Point) land III H and IV I and II II and III

Question

3. Which two of the following statements are correct concerning the depreciation of an item of property, plant and equipment? 1. An enterprise shall continue recognizing depreciation even if the new estimate of residual value exceeds asset's carrying amount. II. The residual value of an asset shall be reviewed periodically and if expectation differs from the previous estimate, the change shall be accounted for as a change in accounting estimate. III. The depreciation charge for each period shall be recognized in profit or loss unless it is included in the carrying amount of another asset. IV. A change in the depreciation method is treated by adjusting prior year's depreciation (1 Point) land III H and IV I and II II and III

3. Which two of the following statements are correct concerning the depreciation of an item of property, plant and equipment? 1. An enterprise shall continue recognizing depreciation even if the new estimate of residual value exceeds asset's carrying amount. II. The residual value of an asset shall be reviewed periodically and if expectation differs from the previous estimate, the change shall be accounted for as a change in accounting estimate. III. The depreciation charge for each period shall be recognized in profit or loss unless it is included in the carrying amount of another asset. IV. A change in the depreciation method is treated by adjusting prior year's depreciation (1 Point) land III H and IV I and II II and III

Solution

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LucasMaster · Tutor for 5 years

Answer

### II and III

Explain

## Step1: Evaluate Statement I<br />### Depreciation should continue even if the new estimate of residual value exceeds the asset's carrying amount.<br />## Step2: Evaluate Statement II<br />### The residual value of an asset should be reviewed periodically and changes should be accounted for as a change in accounting estimate.<br />## Step3: Evaluate Statement III<br />### Depreciation charge for each period should be recognized in profit or loss unless included in another asset's carrying amount.<br />## Step4: Evaluate Statement IV<br />### A change in the depreciation method is not treated by adjusting prior year's depreciation but prospectively.
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