As you know, useful life on an asset is an estimate (unless you made a mistake saying that for an example a computer should be used say for 25 years, which obviously cannot be true). So it\u2019s an estimate based on the information available at the time you are making it.<\/p>\n
Subject to changing condition, changing business and changing technology and innovation, some assets tend to either be in use for a shorter or for a longer period than initially determined. As you no doubt can guess, in such a situation, the useful life, the period you show in your accounting you are going to be using the asset and spread the expenses over, should reflect the actual usage. That is the useful life should respectively either be short or longer than you\u2019ve got it right now.\u00a0<\/p>\n
Effectively how one would go about changing the useful life and what\u2019s also considered as one of the easiest methods, is taking the carrying value of an asset in question and the new estimated useful life (presuming this period is the full remaining period) and treating those two value as the amount that\u2019s depreciating into expenses over the period. However, if the useful life you\u2019ve determined for an asset taking into consideration all the new information is a full period including already the period the asset has been used already, you just deduct the period the asset has been in use from the full period.<\/p>\n
And with this you\u2019ve changed the useful life of an asset in your accounting. Note that should the asset not be in use anymore, but still has a carrying value, this should be expensed right away. Similarly, if an assets useful life is actually shorter than currently in your accounting, the carrying value should be depreciated into expenses also more aggressively so that the carrying value would reach zero at the end of the useful life of the asset.<\/p>\n","protected":false},"excerpt":{"rendered":"
As you know, useful life on an asset is an estimate (unless you made a mistake saying that for an example a computer should be used say for 25 years, which obviously cannot be true). So it\u2019s an estimate based on the information available at the time you are making it. Subject to changing condition, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":["post-4924","post","type-post","status-publish","format-standard","hentry","category-1-5-3-subsequent-measurement"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4924"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4924\/revisions"}],"predecessor-version":[{"id":4925,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4924\/revisions\/4925"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4924"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}