medium · Financial Accounting assets
On Jan 1, 2024, a company found it had used a 10-year life for a patent when the legal life was only 8 years. It has already recorded two years of amortization (2022 and 2023).
How is this handled?
- As a change in reporting entity.
- As an error correction requiring restatement of 2022 and 2023.
- As a change in accounting estimate handled prospectively.
- By taking a double amortization charge in 2024 to catch up.
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