Do all items of property plant and equipment have a useful l

Do all items of property, plant, and equipment have a useful life? can you explain?

Solution

Yes, all items of property, plant, and equipment (PPE) have a useful life in which the firm generate their revenues by generating the products and services through the use of PPE.

PPE, called as tangible fixed assets, is a class of assets (i) which have physical existence, (ii) which are held for a company’s internal use and (iii) which are expected to generate economic benefits for the company over more than a year.

These assets loses their important as the time passes or more they are used. But their value generally does not drop to zero even at the end of their useful life because they normally have some secondary use or the parts of the assets could be replaced to make the asset reused into another fixed asset.

So, it would not be wrong to say that these assets has end-less life.

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