Archive / 2.03 Useful Lives of Assets

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Changing the useful life of an asset

Now that you have decided to change the useful lives, there’s that little extra work which needs to be done and you’re all sorted. We are going to show how to do it through an example – we are changing a laptop’s useful life from 2 years to 3 years. Let’s say that after the […]

Why change fixed assets’ useful lives?

The very first and obvious answer is „because it’s required to review the useful lives at least once a year“. Should they in reality differ from what has been set for the assets in accounting, they need to be changed in a way they would reflect the real usage once again. This is the “must […]

Change in estimates

Two major areas where estimates are used in accounting for property, plant and equipment as well as intangibles are their useful lives and residual values. They are important mainly because although they are determined right from the initial recognition, unlike the cost value, they are subject to change when conditions do. The amount you paid […]