FSA: asset write down otherwise, usually, write, decrease

Walex

usually refer to asset residuel value decrease? otherwise how it lead to overestimate of expense in prior years (depreciation) thanks

kkn006

i havent understood ur question clearly.

are you asking why depreciation expense is overestimated if salvage value is reduced? if this is the question. the answer is simple, right?

using straight line depreciation:
depreciation expense = (cost - salvage value/useful life)

from the equation if salvage value is lower obviously ur depreciation expense overestimated in first few years till u hit the salvage value then u'll have no depreciation expense at all.