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Depreciation

Useful life o...

Question

Useful life of a depreciation asset should be estimated after considering:

A

Expected Physical wear & tear

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B

Obsolescence

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C

Legal or other limits on the use of the asset

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D

Historical cost

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E

(A), (B), & (C)

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Solution

The correct option is B (A), (B), & (C)
Useful life of asset is decided on the basis of its use and expected physical wear & tear, legal or other limits on the use of the asset.
Useful life means for how many years owner can use machine in good condition and with good output.

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