A change in the estimated useful life of a non-current asset is normally accounted for as what type of change?
Correct answer: B. A change in accounting estimate
- A. A prior-period error correction
- B. A change in accounting estimate
- C. A change in accounting policy
- D. A discontinued operation
Explanation
Useful life is an accounting estimate because it depends on expected future consumption of economic benefits. A revised estimate is generally applied prospectively to current and future periods.
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About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
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