Fraser Ltd

question 67

Multiple Choice

Fraser Ltd. has decided to change the estimate of the useful life of an asset that has been in service for two years. Which of the following statements describes the proper way to revise a useful life estimate?

• A) Revisions in useful life are permitted if approved by Canada Revenue Agency.
• B) Both the current and future years will be affected by the revision.
• C) Retroactive changes must be made to correct previously recorded depreciation.
• D) Only future years will be affected by the revision.

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Definitions:

Insurance Contract

A legally binding agreement between an insurer and the insured, detailing the terms for the payment of claims under certain conditions.

Securities Act

A law or legislation that regulates the issuance and sale of securities to protect investors against misrepresentation, deceit, and other frauds.

Proxy

A document evidencing the transfer of a shareholder’s voting right to an appointee, either with instructions for voting, or allowing discretion to be exercised by the appointee, at a meeting of shareholders of the corporation.

Transferred Right

Involves transferring a legal right from one party to another, which could include property rights, contractual rights, or other legal entitlements.