FINANCIAL ACCOUNTING

INFORMATION:-

AD Ltd purchased a machine to the value of R345 000 (vat inclusive) on 1 January 2021. They estimated the residual value to be RIO 000 and the useful life to be 10 years.

On 1 January 2023, the useful life was determined that only 5 years was remaining and a residual value of R5 000.

Assume a tax rate of 30%

REQUIRED: Disclose the change in estimate for the year ended 31 December 2023

5.2 Discuss how the following errors should be corrected

5.2.1 Errors that occurred in the current period

5.2.2 Immaterial errors from prior period

5.2.3 Material error from prior period