Over what period should an addition to an existing long-lived asset be depreciated? Explain.

Over what period should an addition to an existing long-lived asset be depreciated? Explain.



The cost of an addition to an existing long-lived asset should be depreciated over the shorter of the estimated life of the addition or the remaining life of the existing asset to which it relates. This rule is necessary because an addition to an existing long-lived asset has no use after the useful life of the existing asset has expired.


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