Dallas Company purchased a delivery van in 2008 At the time of purchase, the vans service life was estimated to be seven years with a salvage value of $500 The company has been using the straight line method of depreciation During 2011, the company determined that because of extensive use, the vans...

According to FASB Statement No 154 a change in dep ...

Dallas Company purchased a delivery van in 2008. At the time of purchase, the vans service life

Question:

Dallas Company purchased a delivery van in 2008. At the time of purchase, the van’s service life was estimated to be seven years with a of $500. The company has been using the straight-line method of depreciation. During 2011, the company determined that because of extensive use, the van’s service life would be only five years with no . Also, the company has decided to change the depreciation method used from straight-line to the sum-of-the-years’- digits method. How would these changes be treated?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...