When an asset lasts longer than its estimated useful life,depreciation no longer should be recorded past the point at which its carrying value equals its residual value.

Question

Quizplus · Accepted Answer

This is because the asset has already been fully depreciated to its residual value, and therefore no further depreciation can be recorded as the asset is considered to have no further economic value to the company. Depreciation is recorded as an expense over the estimated useful life of an asset, and the residual value is the estimated value of the asset after it has been fully depreciated.

When an Asset Lasts Longer Than Its Estimated Useful Life,depreciation