Practice prompt · Q:long-lived-asset-estimates-and-exits/estimate-change-versus-error-001

Distinguish an estimate revision from an error

Formative evidence timeline item separating new information from an earlier omission or misuse.

Updated Aug 6, 2026 Review due Nov 6, 2026

Practice

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Which fact pattern most clearly supports a prospective change in accounting estimate rather than an error correction?

Choose the best answer. A New Year 4 maintenance and replacement evidence supports a revised remaining life; prior estimates used information reasonably available at each earlier date. B A signed purchase contract in the Year 1 file limited use to three years, but the preparer omitted it when assigning a six-year life. C Management prefers a lower Year 4 expense and selects a longer remaining life without new operating evidence. D The asset ultimately lasts longer than originally expected, so the original estimate was necessarily an error.

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Answer: A

Choice A is the only fact pattern that affirmatively identifies new information and preserves the supportability of earlier estimates. Choice B describes omitted earlier information, C lacks evidence, and D confuses outcome variance with error.