Accounting Treatment of Changes in Depreciation Method From SLM to WDV as per Ind AS Framework

When a company decides to change its depreciation method, it must carefully assess the accounting implications of this transition. Such a change is not merely a technical adjustment but has broader implications on the company’s financial statements, tax liabilities, and overall financial position. This raises critical questions about its classification—whether it constitutes a change in accounting policy or a change in accounting estimate under Ind AS 8 and Ind AS 16. Furthermore, the treatment of past financial statements comes into question—whether retrospective adjustment aligns with accounting standards or if the change should be applied prospectively. This document delves into the relevant provisions, exploring the correct approach to ensure compliance with financial reporting requirements.

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