Which of the following is TRUE when the estimate of an asset's useful life is increased?

Question

Quizplus · Accepted Answer

If the estimate of an asset's useful life is increased, the annual depreciation expense is decreased for the remaining years of the asset's life. This is because depreciation expense is calculated by dividing the cost of the asset by its estimated useful life, so a longer useful life would result in a smaller annual depreciation expense. The new estimate is not ignored until the last year of the asset's life, and prior years' financial statements do not need to be restated unless the estimate change results in a material error in the financial statements.

Which of the Following Is TRUE When the Estimate of an Asset's