Fixed asset Report

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Not saying that anybody here is right or wrong, but this discussion caught my interest and I wanted to add my 2 cents.

Personally, I view useful life estimates as just estimates. You can definitely revise them, but they’re more likely to be wrong so why bother with the added complexity of revising your estimates. I could have used 30 pickup trucks of a certain make for an average useful life of 7 years but that doesn’t mean that next one will live for 7 – it could be 3 and it could be 15, there’s no way of telling except for running it till it stops being useful.

Then there’s the “useful” part of things, this usually doesn’t mean until the asset is dead but it generally means until keeping the assets is economically infeasible like for example when its cost to keep exceeds the cost to replace.

I find that extremely difficult to judge, unless of course it’s a piece of heavy machinery and its supplier provides certain information, guarantees and support, possibly an annual maintenance contract.

So while I agree with @Panashe_Mlambo in theory, but I can’t completely dismiss the justifications of @Wornout @Patch and @Tut because these situations are often unavoidable.

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Obvious an area that as @Panashe_Mlambo alerted to is creating tension between accounting standards and tax-rules. Sites such as Fully Depreciated Asset - Overview, Calculation, Examples give insight into what is in most jurisdictions acceptable even preferred practice as far as tax authorities are concerned being holding zero value stock on the books until disposed. Also in many countries one can ask to aggressively depreciate some assets thereby increasing the expenses and thus reduce the tax-burden in early years of using an asset to help a business grow faster.

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2ndly, below is an extract from Property, Plant and Equipment (NZ IAS 16)

Its still being used so its use full life is still going

and as I said the assets were set up when it was 500 and under and the client requested that I did not expense them.