Read the scenario and
associated questions below. Research the
pertinent issues and write a three-to-four-page paper to explain the accounting options for
the scenario.
AT & T company was depreciating its antennas over 20
years. The total cost of the antennas
accounted for 20 million dollars. It was
recently discovered that the antennas useful life is only seven years due to
new technological development.
With reference to the above scenario answer the
following questions.
1.
What is the accounting implication in this
situation and why?
2.
What promulgated Accounting Standards should be
followed? Provide your rationale.
3.
How and why should this discovery be recorded
in the financial statements of the company?
Explain your response.
4. If the company issues quarterly financial
statements and the discovery is made in the third quarter, should this impact
be shown prospectively or retroactively and in what specific time period? Explain your response.
5.
As the accountant, what could you recommend to
management and why?
Prepare a paper addressing the accounting
implications. Explain your rationale.