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Change in Depreciation Estimate CalculatorProspective Revision

What do the numbers come to once the work is shown?

New annual depreciation after a revision of useful life or salvage, applied prospectively to the remaining book value.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Revised annual depreciation
$16,000
Remaining book value less new salvage over the new remaining life
Prior annual depreciation
$22,000
Change in annual expense
-$6,000
Drawn to one scale
Revised annual depreciation$16,000
Prior annual depreciation$22,000
Change in annual expense-$6,000
Book value at date of change$152,000
Accumulated depreciation to date, not restated$88,000
All results
MeasureResult
Revised annual depreciation$16,000
Prior annual depreciation$22,000
Change in annual expense-$6,000
Book value at date of change$152,000
Accumulated depreciation to date, not restated$88,000
How this was worked out
Work shownrecomputed as you type
Old annual = (cost - salvage) / life
Book value = cost - old annual x years taken
New annual = (book value - new salvage) / remaining life

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Old annual = (cost - salvage) / life
  • Book value = cost - old annual x years taken
  • New annual = (book value - new salvage) / remaining life

How it works

A change in useful life or salvage value is a change in accounting estimate. It is applied prospectively: prior years are not restated, and the remaining book value less the new salvage is spread over the new remaining life.

Disclose the change and its effect when it is material. Enter the remaining life from the date of change, not the new total life. A negative change in annual expense means the revision lowers depreciation.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Do I restate prior years?

No. The effect is carried in current and future periods.

What if the new life is longer?

Annual expense falls when the longer life outweighs any rise in salvage value, as in the example.

Is this the same as an error correction?

No. An error in prior estimates is treated differently from a change in estimate. Assess which applies.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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