The useful life of an asset is estimated differently from one company to the next. This can greatly effect financial statements as you can see in the example below.

Nuware RP Stuart

Fixed Assets: $678,993 $430,256

Depr Exp: $ 36,356 $ 26,900

Est Useful Life: 18.68 15.99

Estimating a longer useful life of assets lowers depreciation expense, therefore raising net income and total assets. In looking at accumulated depreciation, we can figure how long fixed assets have been on the books:

Nuware RP Stuart

Fixed Assets: $678,993 $430,256

Accum Depr: $304,500 $135,692

Years owned: 8.41yrs 5.12yrs

How does the difference in average age of Nuwares and RP Stuarts fixed assets impact Nuwares pre-tax reported income in 2013 and its 2013 balance sheet?