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The Discussion in IAS 16 Paragraphs 60-62 Indicates That a Change

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Essay

The discussion in IAS 16 paragraphs 60-62 indicates that a change in depreciation method is usually a change in accounting estimate. Explain the logic behind why a change in depreciation method is normally considered a change in estimate.


Definitions:

Rate of Return

A financial metric used to calculate the percentage profit or loss of an investment relative to its cost.

Beta Risk

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

Diversified Portfolio

An investment portfolio constructed to spread risk by selecting assets across various classes.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

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