for the situation below: submit a short example of the disclosure note:

Situation III: Hyde decides in January 2016 to adopt the straight-line method of depreciation for equipment. The straight-line method will be used for new acquisitions, as well as for previously acquired equipment for which depreciation had been provided on an accelerated basis.

Memorandum

To: Hyde President

From: Leonora Mills; Accountant

Date: 10/25/17

RE: Switching to Straight Line Depreciation Method

Type of Accounting Change:The change in the method of computing depreciation represents a change in estimate resulting from a change in accounting principle. Because a change in the depreciation method is adopted to reflect a change in estimated future benefits from the asset, the pattern of receiving those benefits, or the company's knowledge about those benefits.

Such changes much of the time are identified with the continuous procedure of acquiring new data and revising estimates and, likewise, changes in estimates similar to changing the estimated valuable existence of a depreciable resource.

Sensibly, the two occasions ought to be accounted for a similar way. Appropriately, the organization reports the change tentatively; previous financial statements are not recast. Rather, the organization utilizes the straight-line method from that point on. The underappreciated cost staying at the time of the change would be depreciated straight-line over the remaining valuable life.

Reporting the change under current GAAP:The change ought to be reflected in the present time frame and future periods. The change in accounting estimates should not be applied retrospectively.

Effect of the change on the balance sheet and income statement:This change will influence the balance sheet in the accumulated depreciation in the present and future years will increment at an unexpected rate in comparison to beforehand revealed, and this will likewise be reflected in the income statement in the current and future years.

Note disclosures:On the footnote the new method adopted and its explanation for the change is required to be disclosed. Likewise, proper justification of new method must be made.