The company's choices for fixed asset on the assets useful life and residual value impact the amount of depreciation recorded.

Question

Quizplus · Accepted Answer

The useful life and residual value of fixed assets have a direct impact on the amount of depreciation that is recorded each year. The longer the useful life and the lower the residual value, the lower the amount of annual depreciation will be, and vice versa. Therefore, the company's choices for fixed asset useful life and residual value can significantly impact their financial statements and tax liabilities.

The Company's Choices for Fixed Asset on the Assets Useful