Useful Life Determination

Useful Life Determination: Accurate Depreciation Based on Real Economic Life

Global Consult provides technical useful life determination services in full compliance with CPC-27 accounting rules, which require that depreciation of fixed assets be calculated based on their real economic useful life -- not merely the rates prescribed by tax authorities. This distinction is critical for ensuring that financial statements reflect the true consumption of economic benefits embodied in each asset.

Technical Inspection

Our field inspection is the foundation of every useful life determination. Our specialized engineering team conducts a thorough on-site assessment of each asset, collecting detailed technical data including:

• Brand, model, and serial number identification
• Supplier and manufacturer information
• Asset number and accounting registration data
• Apparent age and physical condition assessment
• Componentization analysis -- identifying major components with distinct useful lives within complex assets
• Photographic documentation of each asset inspected

Componentization is a key element of our inspection process. For complex assets such as industrial machinery, buildings, and production lines, we identify components that have significantly different useful lives and should be depreciated separately, in accordance with CPC-27 requirements.

Assessment Questionnaire

Beyond the physical inspection, we apply a structured assessment questionnaire to capture operational and strategic information that directly influences useful life estimates. This questionnaire covers:

• Complete maintenance history and preventive maintenance programs
• Records of major overhauls, retrofits, and upgrades performed
• Future capital expenditure plans and modernization schedules
• Asset substitution and replacement policies
• Operational shifts and utilization intensity (single shift, double shift, continuous operation)
• Environmental and regulatory factors that may affect asset longevity

Final Report

Our useful life determination report provides a comprehensive, defensible estimate of each asset's remaining economic useful life. The report considers:

• Field inspection data and physical condition findings
• Questionnaire responses regarding maintenance and operational context
• Technical specifications from manufacturers and industry references
• Degree of technological and functional obsolescence
• Comparison with industry benchmarks and reference tables

All reports are prepared in full compliance with IBAPE (Brazilian Institute of Engineering Assessments and Expertise), ABNT (Brazilian Association of Technical Standards), and CPC-27 accounting standards. Our methodology and conclusions are documented with sufficient detail to support external audit reviews and regulatory inquiries.