Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 9 - Reporting and Analyzing Long-Lived Assets - Exercises: E9-15

Answer

M/S Alliance Atlantis communications Sub: Change of policy of Amortization of Intangible assets. Dear Sir, While going through the accounts for the year 2010, it has been observed that the accounting policy for amortization of broadcast rights has been changed. Earlier, the company amortized broadcast rights over the lessor of 2 years or the contracted exhibition period, now this has been changed over to contracted exhibition period.

Work Step by Step

We would like to inform you that by change in the policy of amortization, the analysis of income statement will be difficult, as the figures of two years will have different basis of amortization. In case it is necessary to change the policy, due to operational / financial reasons, proper noting are required in the financial statements, and proper comparisons with details should be provided. Regards
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