If the estimated useful life of an asset was originally 10 years and then later changed to 12 years, the effects of this change should be:

Question

Quizplus · Accepted Answer

When the estimated useful life of an asset is changed, the effect of this change is accounted for prospectively. This means the remaining book value of the asset, after accounting for any accumulated depreciation up to the point of the estimate change, is spread out over the revised remaining useful life. This adjustment does not require retrospective application or adjustments to past financial statements, nor does it involve special items on the income statement or immediate adjustments to accumulated depreciation and retained earnings in the year of change.

If the Estimated Useful Life of an Asset Was Originally