Useful lives for fixed assets can range from five years to 20 years, according to Asset Works. In order to find more detailed listings of fixed asset useful lives, a person can refer to General Accounting Standard 34.
The owner of an asset is responsible for determining the appropriate useful life under Generally Accepted Accounting Principles, according to the Houston Chronicle. This useful life will represent the period over which the asset's cost are recovered. When a person purchases a fixed asset, the costs are not expensed but instead capitalized. The expense is taken in future periods, and this expense is known as depreciation expense.
There are multiple types of costs that can be capitalized and depreciated, states Accounting Tools. These costs include the purchase price of an item, construction costs, inbound freight and site preparation. For these costs that are capitalized, each one of them must be assigned a useful life under GAAP. This useful life is the ultimate determination of the associated depreciation expense in a given period. A person needs to properly account for these items so that the financial statements are represented accurately. A person can visit the Internal Revenue Code for recommended useful lives if there is any uncertainty, according to CBIZ.