Multiple choice

Method of depreciation can be changed, only if

  1. change is required by law

  2. change is required by ICAI

  3. At any time, change depends upon the will of businessman

  4. both (1) & (2)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounting standards (specifically AS-10 in India) mandate that depreciation methods cannot be changed arbitrarily. Changes are permitted only when: (1) required by statute or law, or (2) required by a professional regulatory body like ICAI. Business owners cannot switch methods at will solely to manipulate profits. This ensures consistency and prevents earnings management through accounting policy changes.

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