Question

IFRS MULTIPLE CHOICE QUESTION 09 ridge, inc follows IFRS FOR ITS EXTERNAL FINANCIAL REPORTING , and cannon company follows GAAP for its external financial reporting. during 2018 both companies changed depreciation methods, from double decking balance to straight line. Compated to double declining balance, for Ridge I Mc the change resulted in a decrease in reported depreciation expense of $90,000, and for Cannon company the change resulted in a reported decrease in depreciation expense of $105,000. the remaining useful lives of the assets impacted by the change in depreciation method is 10 years for both companies. How much would this change the net income reported by ridge inc and cannon company for the year ended December 31,2018

APTER IFRS Multiple Choice Question 09 Ridge, Inc. follows for its external financial reporting and Canon Company GAAP for its external and reporting. Du 2018, both companies changed depreciation method to double de cett e to double-decin balance, for Ridge, Inc. the change d in a decrease in reported depreca p of 10,000, and for Canon Company the change sted in a reported decrease in depreciation s 105.000 The remaining u l ves of the impacted by the change in depreciation et 10 years for both companies. H oud this changem e nt come reported by Ridge, Inc. and Cannon company for the year anded Decebe 31, 2017 ogs.inc Canon Company Incres 190.000 Increase $10,500 2 therese 590,000 Increase $105.000 Decres 50,000 Decree 105.000 terase 59.000 Increase $10,500

Answer 1

The net income for both the companies will increase by the amount of decrease in depreciation expense. Hence, Ridge Co. Cannon Co. Increase $90,000 Increase $105,000 Thus, second option is the correct option.