Enos Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years. Which of the following statements describes the proper way to revise a useful life estimate?

Question

Quizplus · Accepted Answer

When revising the estimate of useful life of an asset, both the current and future years will be affected. This is because the revision is based on the remaining useful life, which affects the remaining years of depreciation expense to be recognized. Retroactive changes to previously recorded depreciation are not necessary, as the revision only affects future periods. Approval from the taxing authority is not required for revising useful life estimates.

Enos Company Has Decided to Change the Estimate of the Useful