Use of a longer useful life for depreciation is an example of conservative accounting.Use of a shorter useful life for depreciation is an example of conservative accounting.

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The use of a longer useful life for depreciation is an example of aggressive accounting, while the use of a shorter useful life for depreciation is an example of conservative accounting. This is because using a longer useful life means less depreciation is charged each year, which increases profit and makes the financial statements look better. On the other hand, using a shorter useful life means more depreciation is charged each year, which decreases profit and makes the financial statements look worse. Conservative accounting takes a more cautious approach and tries to minimize the risk of overstating profits or hiding liabilities.

Use of a Longer Useful Life for Depreciation Is an Example