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As per Accounting Standard 6 issued by ICAI on depreciation, under which circumstances the method of depreciation may be changed? (i) When the adoption of new method is required by the statute. (ii) When it is required for compliance with an accounting standard. (iii) When it is considered that the change would result in a more appropriate preparation or presentation of financial statements.

As per Accounting Standard 6 issued by ICAI on depreciation, under which circumstances the method of depreciation may be changed? (i) When the adoption of new method is required by the statute. (ii) When it is required for compliance with an accounting standard. (iii) When it is considered that the change would result in a more appropriate preparation or presentation of financial statements. Correct Answer (i), (ii), (iii)

Accounting Standard- A set of concepts, standards, and procedures that constitute the foundation of financial accounting policies and practices are known as accounting standards.

Key Points

Depreciation - Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its usable life or expected life. In simple terms, it can be referred to as a reduction in the value of tangible fixed assets over time due to its wear and tear.

As per accounting standard 6 on depreciation accounting, there is various method of calculating depreciation such as straight-line method, written down value method, unit production method, etc. 

As per IAS 8 on Accounting Policies, Changes in Accounting Estimates and Errors, a company is allowed to change its accounting policy:

  • Only if the change is mandated by a standard or interpretation.
  • when the adoption is mandated by law.
  • financial statement results in more accurate and timely information on the effects of transactions, other events, or conditions on the entity's financial position, financial performance, or cash flows.

Related Questions

Which of the following statements are correct in respect of the straight-line method of charging depreciation? (i) It is easy to use. (ii) It is recognized by Accounting Standard 6 issued by ICAI. (iii) It realistically matches the cost and the revenue. (iv) It takes into consideration the interest on the amount invested in fixed asset. (v) This method is recognized by The Income Tax Act 1961.
Which of the following statements are true/ false?
1. Every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 9.33% of the salary or wages earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.
2. Bonus will be paid in cash to the employees.
3. If the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer is bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wages earned by the employee during the accounting year subject to a maximum of 10% of such salary or wage.
4. Bonus needs to be paid within a period of eight months from the close of the accounting year.
Student A rub solid baking soda on dry litmus paper, B rub metal oxide on dry litmus paper, C dip litmus paper in vinegar, D dip litmus paper in aqueous solution of baking soda. The observations were made by student A, B, C, and D should be- Student Effect on dry red litmus paper Effect on dry blue litmus paper A Color Changed to blue No change B No change Color changed to red C No change Color changed to red D Color Changed to blue       Color changed to red The correct observation was made by the student
In the question below are given three statements followed by three conclusions numbered I, II and III. You have to take the given statements to be true even if they seem to be at variance with commonly known facts. Read all the conclusions and then decide which of the given conclusions logically follows from the given statements disregarding commonly known facts. Statements: I. Some preparation are not good II. Only a few good are wise III. No wise is preparation Conclusions: I. Some good are not wise is a possibility II. No preparation is wise III. Some preparation are good is a possibility
The following observations were made by student A, B, C, and D when they rubbed solid baking soda on dry litmus paper : Student Effect on dry red litmus paper Effect on dry blue litmus paper A Color Changed to blue No change B No change Color changed to red C Color changed to blue Color changed to red D No change No change The correct observation was made by the student
Read the following statements.
1. Financial statements are only interim reports.
2. Financial statements are prepared on the basis of realisable values.
3. The preparation of financial statements is not an ultimate aim.
4. Certain assumptions are necessary to prepare financial statements.
Which of the following combinations consists of all true statements?
A passage is given with five questions following it. Read the passage carefully and select the best answer to each question out of the given fouralternatives. Teaching about compassion and empathy in schools can help deal with problems of climate change and environmental degradation,” says Barbara Maas, secretary,
Standing Committee for Environment and Conservation, International Buddhist Confederation (IBC). She was in New Delhi to participate in the IBCs governing
council meeting, December 10-11, 2017. “We started an awareness campaign in the year 2005-2006 with H H The Dalai Lama when we learnt that tiger skins were
being traded in China and Tibet. At that time, I was not a Buddhist; I wrote to the Dalai Lama asking him to say that this is harmful and he wrote back to say, “We
will stop this.” He used very strong words during the Kalachakra in 2006, when he said, If he sees people wearing fur and skins, he doesnt feel like living. This sent
huge shock waves in the Himalayan community. Within six months, in Lhasa, people ripped the fur trim of their tubba, the traditional Tibetan dress. The messenger was ideal and the audience was receptive,” says Maas who is a conservationist. She has studied the battered foxs behavioral ecology in Serengeti,Africa. She heads the endangered species conservation at the Nature and Biodiversity Conservation Union (NABU) International Foundation for Nature, Berlin. “I metSamdhong Rinpoche, The Karmapa, HH the Dalai Lama and Geshe Lhakdor and I thought, if by being a Buddhist, you become like this, I am going for it, “says Maas, who led the IBC initiative for including the Buddhist perspective to the global discourse on climate change by presenting the statement, The Time to Act is Now: aBuddhist Declaration on Climate Change, at COP21 in Paris. “It was for the first time in the history of Buddhism that leaders of different sanghas came together to take a stand on anything! The statement lists a couple ofimportant things: the first is that we amass things that we dont need; there is overpopulation; we need to live with contentment and deal with each other and theenvironment with love and compassion,” elaborates Maas. She is an ardent advocate of a vegan diet because “consuming meat and milk globally contributes more toclimate change than all "transport in the world.” Turning vegetarian or vegan usually requires complete change of perspective before one gives up eating their favorite food. What are the Buddhist ways to bringabout this kind of change at the individual level? “To change our behavior, Buddhism is an ideal vehicle; it made me a more contented person,” says Maas, who grewup in Germany, as a sausage chomping, meat-loving individual. She says, “If I can change, so can anybody”. Why did Ms. Barbara Mass say “If I can change, so can anybody”?
Principle: When a statute authorizes the doing of an act, which would otherwise be a tort, the party injured has no remedy except the one, if any, provided by the statute itself. The act done in pursuance of statutory power must be done without negligence.
Facts: Delhi Metro Rail Corporation (DMRC) is authorized by a statute to build and run metro rails oh the specified routes in Delhi. One of the pillars of the metro line collapsed causing death of five persons. It was found that the pillar collapsed because the engineer has not properly inspected it. Dependants of the deceased claimed damages from Delhi Metro Rail Corporation (DMRC).
A lady wants to buy the following items in the given price range- 1. Tomato between Rs. 40 and Rs. 45 per kg. 2. Grapes in the price range of Rs. 80 and Rs. 90 per kg. 3. Milk packets at Rs. 23 per liter. In which shop from the following will she definitely get all her items/ A. Shop S sells tomato at Rs. 22.5 per half kg, Grapes at Rs. 82 per kg and milk at Rs. 24 per liter. B. Shop H sells grapes at Rs. 21 per quarter kg, milk at 12.5 per half litre and tomato at Rs. 22 per half kg. C. Shop O sells milk at Rs. 11.5 per half litre, tomato at 21 per half kg and grapes at Rs. 43 per half kg. D. Shop P sells tomato at Rs. 23.5 per half kg, grapes at Rs. 85 per kg and milk at Rs. 23 per litre.
The conditions regarding selection from a list of suitable candidates to be called for interview after a written examination for appointment of management-level persons to a multi-national company providing accounting services and sales are mentioned below. Candidates: a) Must have a Bachelor's degree in Basic Science with 65% or more marks or BE with 55% or more marks. b) Must have passed the examination with 70% or more marks. c) Age must be between 25 to 30 years as of 1/4/18. d) Must have 3 years of experience in an Accounting Institution and must have a Diploma in Accounting with 60% or more marks. e) Must be currently getting CTC of Rs. 6 lakh or more per annum. If the candidate: 1) If he fulfills all the other conditions other than A above, he will be designated as Junior Accountant. 2) If he fulfills all the other conditions other than (d) and (e) above, he can be designated as Trainee-Accountant. If he fulfills all the above conditions including 5 years of experience, he can be designated as a Senior Accountant. He can be designated as Manager (Accounts) if he fulfills all the above criteria including educational qualifications of CA/ ICWA/ MBA (Finance). Study all the above information and answer the following question. Varun has passed the CA exam and has a bachelor's degree in basic science and a diploma in accountancy, having scored 75% or more in the written examination during his entire career and also in the written examination. His age is 27 years and with 4 years of experience in Accountancy, he has a CTC salary of 18 lakhs per annum. To which of the following positions can he be referred? Select from the given options.