> The FR3 quote was just to show that accountants do make prior year
> adjustments. I suspect that in moral depreciation cases they most often
> do what Chai-On suggested -- write off in the current year.
>
> They would be wrong to do so because in the example years 1 to 4 are
> exactly the same and year 4 should not be saddled with the whole
> adjustment.
Hi Phil:
You can't exactly estimate the rate of technological obsolescence in
advance in many, if not most, cases. The accountants could only see
the loss in valuation in year 4 and could not reasonably anticipate the
exact loss in year 4 at the time the depreciation schedule was first
prepared (year 1).
In solidarity, Jerry_______________________________________________
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Received on Sun Sep 6 16:54:22 2009
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