Lets talk about revising periodic Depreciation In the fourth

Let’s talk about revising periodic Depreciation.

In the fourth year of an asset’s 5-year useful life, the company decides that the asset will have a 6-year service life. How should the revision of depreciation be recorded? Why?

Solution

If life of any asset is revised than effect is given prospectively and on remaining asset, depreciation is charged on revised useful life basis.