When the amount of annual depreciation is revised because of a change in the estimated useful life of an asset,prior years' financial statements should be restated.

Question

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Prior years' financial statements are not restated when the estimated useful life of a long-lived asset changes.Instead,a new amount of depreciation expense is determined as follows.The book value less the revised residual value of the asset is depreciated over the remaining useful life using the new estimate.

When the Amount of Annual Depreciation Is Revised Because of a Change