Final answer:
The service life of an asset refers to the time period it is expected to be in productive use, while the physical life represents its actual lifespan. Factors like technological advancements, market demand, and manufacturer estimates determine the service life, while wear and tear, maintenance practices, and environmental conditions influence the physical life.
Step-by-step explanation:
The service life refers to the time period during which an asset is expected to be in productive use, while the physical life represents the actual lifespan of the asset before it becomes unusable or needs significant repairs.
The service life is typically determined based on factors such as technological advancements, market demand, and the useful life estimated by the manufacturer. On the other hand, the physical life can be influenced by factors like wear and tear, maintenance practices, and environmental conditions.
For example, a car may have a service life of 10 years, but its physical life may be shorter if it experiences frequent breakdowns or is not properly maintained.