The useful life of an item of property, plant and equipment is:
A) The length of time it is productively used in a company's operations.
B) Never related to its physical life.
C) Its productive life, but not to exceed one year.
D) Determined by the FASB.
E) Determined by law.

Question

Quizplus · Accepted Answer

The useful life of an item of property, plant and equipment refers to the length of time that it is productively used in a company's operations. It is not necessarily related to its physical life, as some assets may become obsolete or no longer useful before they physically wear out. The useful life is also not limited to one year and is not determined by the FASB or by law, but rather by the company's management based on their estimates of future use and expected wear and tear of the asset.

The Useful Life of an Item of Property, Plant and Equipment