A Change In The Estimated Useful Life Of Equipment Requires at Life

A Change In The Estimated Useful Life Of Equipment Requires. Three years later, the remaining useful life of the machine was estimated to be only 1 years. Abc ltd should account for the change in estimate prospectively by allocating the net.

Earnings in 2004 will be reduced by $500,000 before tax as a result. The process of spreading the cost of a fixed asset over the asset's useful life is called No residual value is expected at the end of the machine’s useful life.

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A change in method of accounting for depreciation should cause an adjustment to current year's depreciation expense and a cumulative effect for the effect of the change on prior year's earnings. A change in the estimated useful life of equipment requires. B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset. A retroactive change in the amount of periodic depreciation recognized in previous years.