A change in the estimated useful life of equipment requires
A) a retroactive change in the amount of periodic depreciation recognized in previous years.
B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset.
C) that the amount of periodic depreciation be changed in the current year and in future years.
D) that profit for the current year be increased.

Question

Quizplus · Accepted Answer

Changing the estimated useful life of equipment affects the calculation of depreciation from the current year forward, requiring an adjustment to the periodic depreciation to reflect the new estimate. Retroactive changes or maintaining previous depreciation rates are not appropriate actions.

A Change in the Estimated Useful Life of Equipment Requires