The equipment is computer, I want to know 10 years Depreciable Life is reasonable or not under GAAP, Are there any clear regulations?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
"The Company records equipment at cost. Depreciation is recorded on a straight-line basis over the equipment's estimated useful life, which is currently estimated to be ten years." The equipment is computer, I want to know 10 years
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