DRS Corporation changed the way it depreciates its computers from the sum-of-the

Question

DRS Corporation changed the way it depreciates its computers from the sum-of-the year's digits method to the straight-line method begining 1/1/09, DRS also changed its estimaed residual value used in computing depreciation for its office building. At the end of 2009, DRS changed the specific subsidiaries constituting the group of companies for which its consolidated financial statements are prepared.

1. For each accounting change DRS undertook, indicate the type of change and how DRS should report change. Be Specific.

Explanation / Answer

1 Change in Depreciation method Change in Accounting Report change from Sum of Digits method to straight Principle retrospectively line 2 Change in estimated residual value Change in estimates report the change prospectively 3 Changing the specific subsidaries Change in entity Changing the financial constituting the group of companies for statements of all prior which its consolidated financial periods presented. statements are prepared

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