Treating supplier credits for acquired assets

Sometimes it is so that you buy an asset, you start a dispute over the price, but since you really need the asset and you want to use it right away, you start using and accounting for it in your books regardless of the ongoing disputes of the price. What you do, is debit the assets and credit the payables. 

However, at some point this dispute is over and you come to a result. Say that this result is in your favor and you will be issued a credit invoice to reduce the price you initially accounted to asset with. How you go about accounting for it is real easy. You first off debit the payable (presuming you haven’t paid to the supplier just yet) and then you credit the cost of the asset. Now, if you haven’t started depreciating the asset yet, the cost is reduced and so is the monthly depreciation charge so there’s nothing more to it. However, if you’ve recognized depreciation already, note that the charge is changed retrospective by the amount the initial monthly charge and the new, adjusted charge differ from one another.

One may argue that why go back and adjust the charge. If the difference isn’t material you can always just account for the difference in the current period, obviously. However, should the difference be significant to your books, I would suggest you go back and adjust the prior period results.