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M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified because
- a)Change in the method of depreciation should be done only with the consent of the auditor
- b)Depreciation method can be changed only from WDV to SLM and not vice versa
- c)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standard
- d)Method of depreciation cannot be changed under any circumstances
Correct answer is option 'C'. Can you explain this answer?
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M/s ABC Brothers, which was registered in the year 2000, has been foll...
Justification for the objection of the auditor regarding the change in the method of depreciation:
Reasons for objection:
a) Change in the method of depreciation should be done only with the consent of the auditor
b) Depreciation method can be changed only from WDV to SLM and not vice versa
c) Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standard
d) Method of depreciation cannot be changed under any circumstances
Justification:
The correct answer is option C, which states that the change in the method of depreciation should be done only if it is required by some statute or if the change would result in a more appropriate presentation of financial statements or compliance with the accounting standard. The auditor's objection is justified because:
1. Consent of the auditor: According to the Companies Act, 2013, any change in the method of depreciation should be done with the consent of the auditor. The auditor's objection is valid as the change has been made without obtaining the auditor's consent.
2. Permissible method of change: As per the accounting standards, a change in the method of depreciation can be made only if it is from WDV to SLM and not vice versa. Thus, the change made by the company is not permissible under the accounting standards.
3. Appropriate presentation of financial statements: The change in the method of depreciation should be made only if it results in a more appropriate presentation of financial statements. In this case, the change has been made solely to qualify as a sick industrial unit, which is not an appropriate reason for changing the method of depreciation.
Thus, the auditor's objection is justified as the change in the method of depreciation does not comply with the accounting standards and is not being made for appropriate reasons.
Reasons for objection:
a) Change in the method of depreciation should be done only with the consent of the auditor
b) Depreciation method can be changed only from WDV to SLM and not vice versa
c) Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standard
d) Method of depreciation cannot be changed under any circumstances
Justification:
The correct answer is option C, which states that the change in the method of depreciation should be done only if it is required by some statute or if the change would result in a more appropriate presentation of financial statements or compliance with the accounting standard. The auditor's objection is justified because:
1. Consent of the auditor: According to the Companies Act, 2013, any change in the method of depreciation should be done with the consent of the auditor. The auditor's objection is valid as the change has been made without obtaining the auditor's consent.
2. Permissible method of change: As per the accounting standards, a change in the method of depreciation can be made only if it is from WDV to SLM and not vice versa. Thus, the change made by the company is not permissible under the accounting standards.
3. Appropriate presentation of financial statements: The change in the method of depreciation should be made only if it results in a more appropriate presentation of financial statements. In this case, the change has been made solely to qualify as a sick industrial unit, which is not an appropriate reason for changing the method of depreciation.
Thus, the auditor's objection is justified as the change in the method of depreciation does not comply with the accounting standards and is not being made for appropriate reasons.
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M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer?
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M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer?.
M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer?.
Solutions for M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation.The objection of the auditor is justified becausea)Change in the method of depreciation should be done only with the consent of the auditorb)Depreciation method can be changed only from WDV to SLM and not vice versac)Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standardd)Method of depreciation cannot be changed under any circumstancesCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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