Assume the company you work for opened its doors for business a few years ago. Due to the success of the business, leadership realizes that the equipment purchased will not last as long as was expected due to the wear and tear to date. As such, the original useful life and salvage value may no longer be accurate. If the business were to change their useful life, does this pose an ethical dilemma? Could the business manipulate the useful life to improve the business's financial situation?

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Adjusting the useful life of equipment is a common practice in accounting as it allows companies to allocate the cost of the asset over its expected u... View the full answer