Useful Life

Definition

The period over which an asset is expected to benefit the business — the denominator of every depreciation/amortization calculation.

Worked Example

Common conventions:

Laptops/phones      3 years
Servers             3-5 years
Furniture           5-7 years
Software licenses   contract term or economic life
Leases (ROU)        lease term

Interpretation & Pitfalls

Useful life is an estimate; if reality diverges materially (asset retired early or extended), the remaining book value is re-spread prospectively — never by rewriting past periods.

In TupicFinance

Useful life on the asset record drives the auto-generated monthly schedule.