Page 27 - FINAL CFA I SLIDES JUNE 2019 DAY 8

Straight line Session Unit 8:
28. Inventories

Double-declining balance

tanties

Units of production

Useful and salvage values, p.219

Useful lives Longer estimate of useful life, decreases depreciation and increases
earnings

Salvage values Higher estimate of salvage value also decreases deprecation and increases
earnings

Both are change in an accounting estimate, p.220, put into
effect in the current period and prospectively.