evision of a Depreciation Estimate Sometimes after a few vears of depreciatio estimates that was made when the asset was olaced in service. The estimates that co the useful life and/or the residual value. If an estimate is revised, you will need to calculate the book value of the asset at that time. The book value will then be used in your normal depreciation formuia a the cost of the asset. n a plant asset, management will revise one or more of the uld be revised are You purchased equipment on 1/1/15 for $160,000. You estimated at that time that the useful life is 5 years and the residual value is $10,000. Calculate the amount of annual depreciation using the straight- iine method: At the end of 2016 (after depreciation has been taken for that year), you revise your estimates. You determine that the equipment still has another 5 years of useful life and a residual value of $20,000. 1) Calculate the book value of the asset after the 2016 depreciation has been recorded 2) Recalculate annual depreciation using the book value as the cost of the asset and your revised estimates