Once the estimated depreciation expense for an asset is calculated:
A) The estimate itself cannot be changed; however, new information should be disclosed in financial statement footnotes.
B) Any changes are accumulated and recognized when the asset is sold.
C) It may be revised based on new information.
D) It cannot be changed, based on the historical cost principle.
E) It cannot be changed, based on the consistency principle.

Question

Quizplus · Accepted Answer

The estimate of depreciation expense can be revised based on new information, such as changes in the asset's useful life or salvage value. This is because depreciation is based on estimates and requires periodic adjustment to accurately reflect the asset's decline in value over time.

Once the Estimated Depreciation Expense for an Asset Is Calculated