A change in the estimated useful life of a plant asset may cause a change in the amount of depreciation recognized in the current and future periods, but not prior periods.

Question

Quizplus · Accepted Answer

A change in estimated useful life will affect the depreciation expense going forward, but it won't affect the previous periods' depreciation. Depreciation for past periods is based on estimates made at the time of purchase or acquisition of the asset.

A Change in the Estimated Useful Life of a Plant