11. When the estimate of an asset's useful life is changed, a. depreciation expense for all past periods must be recalculated. b. there is no change in the amount of depreciation expense recorded for future years. c. only the depreciation expense in the remaining years is changed. d.
See Page 1. 11. When the estimate of an asset's useful life is changed, a. depreciation expense for all past periods must be recalculated. b. there is no change in the amount of depreciation expense recorded for futureyears. c. only the depreciation expense in the remaining years is changed. d. None of the above is true.
21. When the estimate of an asset's useful life is changed, a. depreciation expense for all past periods must be recalculated. b. there is no change in the amount of depreciation expense recorded for future years. c. only the depreciation expense in the remaining years is changed. d. None of the above are true. 22.
Oct 15, 2016 · To determine a new depreciation amount after a change in estimate of a plant asset's useful life, the asset's remaining depreciable cost is divided by its remaining useful life. 20. Additions and improvements to a plant asset that increase the asset's operating efficiency, productive capacity, or expected useful life are generally expensed in the period incurred.
If there is a significant change in an asset's estimated salvage value and/or the asset's estimated useful life, the change in the estimate will result in a new amount of depreciation expense in the current accounting year and in the remaining years of the asset's useful life.
0:265:55Depreciation | Change in Useful Life - YouTubeYouTubeStart of suggested clipEnd of suggested clipYou just take the revised figures you calculate the new annual depreciation. And you move on you donMoreYou just take the revised figures you calculate the new annual depreciation. And you move on you don't have to do a restatement.
If changing circumstances impact a fixed asset, it is possible that the remaining useful life will also be changed; this impacts the remaining amount of depreciation that has not yet been recognized, but has no impact on depreciation that has already been recognized in prior periods.Feb 5, 2022
Salvage valueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset's estimated salvage value is an important component in the calculation of a depreciation schedule.
A change in the estimated useful life or salvage value of a long-lived asset is a change in accounting estimate and should be accounted for prospectively in the period of change and future periods in accordance with ASC 250-10.
Useful life is “an estimate of the average number of years an asset is considered useable before its value is fully depreciated.” 1.
The first decision to be made when determining an intangible asset's remaining useful life is whether there should be one at all. An intangible asset is considered to have a finite life expectancy if there is a foreseeable limit on the period over which the asset is expected to contribute to cash flow.
The expense recognition principle that requires that the cost of the asset be allocated over the asset's useful life is the process of depreciation. For example, if we buy a delivery truck to use for the next five years, we would allocate the cost and record depreciation expense across the entire five-year period.
Increasing the useful life of an asset decreases the amount of depreciation. also, increasing the residual value will decrease the depreciable cost of the asset. this will increase the amount of useful life the company has, and decreases the depreciation expense each year, increasing net income.
How does management estimate useful lives and residual values? They use professional judgment.