CPA Uganda Intermediate Practice Questions - ICPAU CPA(U) Intermediate Level Exam

Access More Questions

A company purchased a manufacturing plant on 1 January 2023 for UGX 120,000,000. It was depreciated using the straight-line method over a 10-year useful life with zero residual value. On 1 January 2025, the company re-evaluated the asset and determined that its remaining useful life was 5 years (implying a total useful life of 7 years). How should this change be treated in the financial statements for the year ended 31 December 2025 under IAS 8?

As a change in accounting policy, requiring retrospective restatement of prior years' depreciation As a change in accounting estimate, resulting in a depreciation expense of UGX 19,200,000 for the year 2025 As a change in accounting estimate, resulting in a depreciation expense of UGX 24,000,000 for the year 2025 As a prior period error, requiring retrospective correction of the 2023 and 2024 financial statements

Correct Answer:

As a change in accounting estimate, resulting in a depreciation expense of UGX 19,200,000 for the year 2025

Access more questions from this quiz

Continue to CPA Uganda Intermediate Practice Questions - ICPAU CPA(U) Intermediate Level Exam for more practice questions and the full quiz experience.

Access More Questions