Estimated Life

The estimated life of an asset is the period over which an asset is to be depreciated. The estimated life of an asset should be based on the asset's condition, how it will be used, and how long it is expected to remain productive or be useful to your organization. The estimated life is usually based on experience in replacing that type of property. You should periodically review the estimated lives of your assets, because you may need to revise your estimates. An advancement in technology may make an asset obsolete earlier than expected. On the other hand, good maintenance can prolong an asset's life.