Asked by Brookelyn Pfleging on Jul 16, 2024
Verified
Explain the impact,if any,on depreciation when estimates that determine depreciation change.
Depreciation Expense
The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.
Estimates Change
Refers to the revision of previous financial estimates based on new information or insights, impacting forecasts and budget plans.
- Understand the impact of changes in depreciation estimates and how to account for them.
Verified Answer
AK
ANURAG KUMARJul 17, 2024
Final Answer :
Depreciation is revised when changes in estimates such as salvage value and useful life occur.If the asset's useful life and/or salvage value changes,the remaining depreciable cost is allocated over the remaining revised useful life of the asset.The new estimate is used to compute depreciation for current and future periods.
Learning Objectives
- Understand the impact of changes in depreciation estimates and how to account for them.
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