Changing circumstances may require a change in the useful life of an asset. When this occurs, it involves a change in
A) accounting estimate rather than a change in accounting principle.
B) accounting principle rather than a change in accounting estimate.
C) both accounting principle and accounting estimate.
D) neither accounting principle nor accounting estimate.

Question

Quizplus · Accepted Answer

Changing the useful life of an asset implies a change in the estimate of how long the asset will be useful to the company, not a change in the fundamental accounting principle used to calculate the value of the asset. Therefore, it is a change in accounting estimate rather than a change in accounting principle.

Changing Circumstances May Require a Change in the Useful Life