Revising an Estimate of the Useful Life or Residual Value

question 186

True/False

Revising an estimate of the useful life or residual value of an item of property, plant and equipment is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements.

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Definitions:

Asset Returns

Represents the earnings generated from an investment in assets, typically expressed as a percentage of the original investment cost.

Net Income Volatility

Net income volatility refers to the degree of variation in a company's net income over time, indicating the unpredictability of earnings.

Cumulative Unrecognized Gains

Gains not yet recognized in financial statements, typically relating to investments or assets.

Pension Plan

A retirement plan that outlines the benefits that employees will receive upon retirement, which is funded by contributions from the employer, the employee, or both.