The following information is available about Company DEF's depreciable assets on January 1, 2019 (numbers are in € millions): Original Cost € 50,000 Depreciable Base € 47,500 Accumulated Depreciation (1/1/2019) € 28,500 Depreciable Life 10 years An analyst believes that the above described estimates do not reflect the underlying economic depreciation of Company DEF's assets. As a result, the analyst wants to adjust Company DEF's financial statements based on his own estimates. While the analyst assumes that the residual value assumption of Company DEF is correct, the analyst adjusts the depreciable life of the asset. In adjusting the financial statements of Company DEF, the analyst decreases the 1/1/2019 accumulated depreciation by €10687.5. What is the depreciable life (in years) that the analyst uses in adjusting Company DEF's financial statements?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following information is available about Company DEF's depreciable assets on January 1, 2019
(numbers are in € millions):
Original Cost
€ 50,000
Depreciable Base
€ 47,500
Accumulated Depreciation (1/1/2019)
€ 28,500
Depreciable Life
10 years
An analyst believes that the above described estimates do not reflect the underlying economic
depreciation of Company DEF's assets. As a result, the analyst wants to adjust Company DEF's
financial statements based on his own estimates. While the analyst assumes that the residual value
assumption of Company DEF is correct, the analyst adjusts the depreciable life of the asset. In
adjusting the financial statements of Company DEF, the analyst decreases the 1/1/2019
accumulated depreciation by €10687.5.
What is the depreciable life (in years) that the analyst uses in adjusting Company DEF's financial
statements?
Transcribed Image Text:The following information is available about Company DEF's depreciable assets on January 1, 2019 (numbers are in € millions): Original Cost € 50,000 Depreciable Base € 47,500 Accumulated Depreciation (1/1/2019) € 28,500 Depreciable Life 10 years An analyst believes that the above described estimates do not reflect the underlying economic depreciation of Company DEF's assets. As a result, the analyst wants to adjust Company DEF's financial statements based on his own estimates. While the analyst assumes that the residual value assumption of Company DEF is correct, the analyst adjusts the depreciable life of the asset. In adjusting the financial statements of Company DEF, the analyst decreases the 1/1/2019 accumulated depreciation by €10687.5. What is the depreciable life (in years) that the analyst uses in adjusting Company DEF's financial statements?
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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