What are the reporting requirements for each of the events

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The following events have come to the attention of Fast Travel Ltd's Chief Financial Officer for the financial year ended 30 June 2020:

i) The useful life of the company's fleet of jets has increased from 10 years to 13 years due to improved maintenance systems that have been recently implemented. The jets were acquired on 1 July 2017 for $5,000,000 and were depreciated on the straight-line basis over its useful life. Assume that the residual value is zero.

ii) An investigation during the current financial shows that the figure for depreciation expense for the jets in the previous financial year ended 30 June 2019 was incorrectly calculated and should have been $100,000 instead of $20,000.

Assume all amounts are material.

Requirement:

Problem a) What are the reporting requirements for each of the above events according to AASB 108 'Accounting Policies, Changes in Accounting Estimates and Errors'?

Problem b) Prepare the necessary journal entries to comply with AASB 108 'Accounting Policies, Changes in Accounting Estimates and Errors'.

Reference no: EM132824121

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