When estimates of useful life and residual value made for the purposes of calculating depreciation,in later years turn out to be materially incorrect and the asset has not reached the end of its useful life,the procedure to be followed is to:

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When estimates of useful life and residual value turn out to be incorrect, the correct procedure is to adjust depreciation expense going forward based on the remaining depreciable amount over the remaining useful life. This is in accordance with the matching principle, as it ensures that depreciation expense is recognized over the asset's useful life. There is no need to issue corrected financial statements for prior years unless the error is material and would significantly affect the financial statements.

When Estimates of Useful Life and Residual Value Made for the Purposes