Depreciation Estimates Langsom

Depreciation Estimates Langsom’s Mfg. is planning for a new project. Usually, Langsom’s depreciates long-term equipment for ten years. The equipment for this project is specialized and will have no further use at the end of the project in three years. The manager of the project wants to depreciate the equipment over the usual ten years and plans on writing off the remaining book value at the end of Year 3 as a loss. You believe that the equipment should be depreciated over the three-year life.

Which method do you think is conceptually better? What should you do if the manager insists on depreciating the equipment over ten years?


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