Prepare the journal entry to account for the change

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Reference no: EM132638081

Question - On 30 June 2023, the end of the current reporting period, Lynch Ltd made a decision, using the information obtained over the past few years, to revise the useful life of a particular item of its buildings acquired ten years earlier for $2 000 000. The useful life was revised from being a total of 25 years to being a total of 15 years. The building was originally depreciated on the straight-line basis over its useful life and it was expected that the asset would have no residual value. No depreciation has been provided in the current period.

REQUIRED -

(a) Prepare the journal entry to account for the change in accounting estimate

(b) Assuming that the change in accounting estimate had a material effect on financial performance for the period, prepare an appropriate supporting note.

Reference no: EM132638081

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