{"id":4269,"date":"2021-05-25T04:04:23","date_gmt":"2021-05-25T10:04:23","guid":{"rendered":"https:\/\/limblecmms.com\/?p=4269"},"modified":"2025-05-30T13:06:47","modified_gmt":"2025-05-30T19:06:47","slug":"useful-life","status":"publish","type":"post","link":"https:\/\/limblecmms.com\/blog\/useful-life\/","title":{"rendered":"Determining the Useful Life of Assets and 5 Ways to Extend it"},"content":{"rendered":"

[vc_row kd_background_image_position=”vc_row-bg-position-top”][vc_column][vc_column_text]All physical assets are subject to aging and deterioration. Buildings decay and crumble, while machinery loses its functionality through wear and tear. To minimize the fallout from major breakdowns and postpone expensive asset replacements, it is only natural that businesses want to know how to calculate and extend the useful life of assets they own.<\/span><\/span><\/p>\n

The idiom \u201ca stitch in time saves nine\u201d is invaluable in this context. While decay is inevitable, you can still do a lot to delay it. Along with considerable cost savings, it will also give you critical insights for better financial planning. To make it all happen, you first need to understand the concept of the <\/span>useful life of an asset<\/span><\/i>.\u00a0\u00a0\u00a0<\/span><\/p>\n

This article explains the relationship between useful life and depreciation, how to determine the expected useful life, and how to extend the life of critical assets.\u00a0<\/span><\/p>\n

Understanding the useful life of an asset<\/span><\/h2>\n

The useful life of an asset is a concept in business related to tangible assets. A tangible asset is any asset owned by the business that has a physical form. It could be land, buildings, machinery, furniture, vehicles, tools, or manufactured products (inventory).<\/span><\/p>\n

The useful life of an asset is the estimated duration to which you can reasonably expect an asset will remain functional and generate income, or provide other benefits.<\/b> Many factors can affect the useful life of an asset, both physical and economic.<\/span>\u00a0<\/b><\/span><\/p>\n

Certain classes of assets, like machinery, come with an expiration date. This gives you a general idea of when the useful life might end. Factors that can shorten an asset’s useful life include improper use\/overuse, accidents, floods, the evolution of new technology that makes the asset obsolete, etc.<\/span><\/p>\n

Conversely, there are measures like <\/span>preventive maintenance<\/span><\/a> that businesses can take to prolong the useful life of important assets. More on that towards the end of the article.<\/span><\/span><\/p>\n

Useful life and depreciation<\/span><\/h2>\n

The useful life of assets is an important variable in business accounting, closely linked to the concept of \u201cdepreciation\u201d \u2013 the decline in the monetary value of an asset. When the useful life of an asset ends, it also becomes fully depreciated.<\/span><\/p>\n

In accounting, depreciation is a valuable tool used to spread the initial cost of asset acquisition across the duration of its use. It has major tax implications and can also impact your balance sheet (as an expense).<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row content_placement=”middle” kd_background_image_position=”vc_row-bg-position-bottom” kd_top_separator_style=”skew-left” kd_top_separator_height=”separator-height-small” kd_bottom_separator_style=”skew-left” kd_bottom_separator_height=”separator-height-small” kd_top_separator=”true” kd_bottom_separator=”true” css=”.vc_custom_1682969576554{margin-bottom: 40px !important;padding-top: 120px !important;padding-right: 40px !important;padding-bottom: 50px !important;padding-left: 40px !important;background: #dde4e8 url(https:\/\/limblecmms.com\/wp-content\/uploads\/cta-laired-hex-4.webp?id=9077) !important;background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;border-radius: 0px !important;}” css_tablet_landscape=”.vc_custom_1682969576554{padding-bottom: 80px !important;}” css_tablet_portrait=”.vc_custom_1682969576555{padding-bottom: 80px !important;}” css_mobile=”.vc_custom_1682969576555{padding-bottom: 80px !important;}”][vc_column][vc_row_inner kd_background_image_position=”vc_row-bg-position-top”][vc_column_inner]

Checklist for Creating a Preventive Maintenance Plan<\/h2>

Following a consistent Preventive Maintenance Plan can make life easier. Use this checklist to create your own!<\/h6><\/header>[\/vc_column_inner][\/vc_row_inner][vc_row_inner content_placement=”top” kd_background_image_position=”vc_row-bg-position-top”][vc_column_inner width=”1\/2″ css=”.vc_custom_1631866454223{padding-right: 50px !important;padding-left: 0px !important;}” offset=”vc_col-lg-6 vc_col-md-12 vc_col-xs-12″ css_tablet_landscape=”.vc_custom_1631866454223{padding-right: 0px !important;}” css_tablet_portrait=”.vc_custom_1631866454223{padding-right: 0px !important;}” css_mobile=”.vc_custom_1631866454224{padding-right: 15px !important;}”][vc_raw_html]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[\/vc_raw_html][\/vc_column_inner][vc_column_inner width=”1\/2″][vc_single_image source=”external_link” alignment=”center” css_animation=”fadeIn” custom_src=”https:\/\/3975608.fs1.hubspotusercontent-na1.net\/hubfs\/3975608\/Content%20Downloads\/PM%20Checklist%20mockup.png”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row kd_background_image_position=”vc_row-bg-position-top”][vc_column][vc_column_text]<\/p>\n

The importance of useful life estimates<\/span><\/h2>\n

Useful life estimates have long-term implications on several different aspects of your business:<\/span><\/p>\n