I think the general rule if that if you replace a fixed asset with a similar one, and the value is known, you write off the old asset, recognize gain/loss, then record the new asset at cost.

My question is, what if the asset is a warranty replacement and the replacement is expected to last longer or have better utility than the old asset? In general, how are these type of warranty replacements with no exchange of cash handled? If there is no book entry, do you just depreciate the remaining NBV over the estimated life of the replacement asset? Are any entries required?

Or, if the general rule is followed and you would write off the old and capitalize the new, what would the entries be? Do you record the new at replacement cost or at NBV of the old?

Thanks.