When the amount of depreciation must be revised because of a change in the estimated useful life of an asset that has been depreciated for several years, it is necessary to restate prior years' financial statements.

Question

Quizplus · Accepted Answer

When the estimated useful life of an asset changes, the depreciation expense is adjusted prospectively, meaning future depreciation is recalculated based on the new estimate, but past financial statements are not restated.

When the Amount of Depreciation Must Be Revised Because of a Change