When the estimate of an asset's useful life is changed,
A) depreciation expense for all past periods must be recalculated.
B) there is no change in the amount of depreciation expense recorded for future years.
C) only the depreciation expense in the remaining years is changed.
D) None of these are true.

Question

Quizplus · Accepted Answer

When the estimate of an asset's useful life is changed, the depreciation expense for past periods is not recalculated. Instead, the company will adjust the remaining depreciation expense for future years to reflect the revised estimate. This results in a change to the carrying value (book value) of the asset on the balance sheet.

When the Estimate of an Asset's Useful Life Is Changed