Field Notes
Useful lives that still match the machine
When depreciation policies outlive the assets they describe — and how to reset life bands without surprising the board.
Depreciation policies written for a different generation of equipment quietly misstate expense. Updating lives is an estimate change — auditors expect reasoning, not vibes.
Start with replacement history
If cold-chain units are swapped every seven years but the policy still says twelve, the mismatch is visible in maintenance and capex plans. Pull the last two replacement cycles per class.
Interview operations, not only accounting
Floor managers know which machines are nursed past their economic life and which fail early. Those conversations belong in the working papers.
Document the change cleanly
State the old life, the new life, the reason, and the period of prospective application. Boards accept clear memos; they resist unexplained spikes in depreciation.
Watch residual values
Aggressive residuals inflate carrying amounts on assets destined for scrap. Align residuals with scrap markets or landlord make-good expectations where relevant.
A dedicated depreciation policy review isolates this work when a full register rebuild is not required.