Definitions for "Estimated Useful Life"
Estimated useful life of an asset is the total number of service units expected from the asset. Service unit may be measure in terms of years the asset is expected to be used, units expected to be produced, miles expected to be driven, or similar measure. In computing the estimated useful life of an asset, the accountant should consider all relevant information, including (1) past experience with similar assets, (2) the asset's present condition, (3) the company's repair and maintenance policy, (4) current technological and industry trends, and (5) local conditions such as weather.
The total number of service units expected from a long-term asset.
The estimated time period leased equipment is expected to be useful. Estimated useful life is used to calculate the maximum allowable term of a "tax-oriented lease".