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

Question

Quizplus · Accepted Answer

When the estimate of an asset's useful life is changed, the remaining depreciable book value will be spread over the asset's remaining life. This means that the depreciation expense for the remaining years will be adjusted accordingly, but there is no need to restate prior years' financial statements. Additionally, the new estimate of useful life should be applied in the current and future periods, rather than waiting until the last year of the asset's life. Therefore, options A and B are incorrect.

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