Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The Company operates in Western and Atlantic Canada, the United States and the Asia Pacific Region with upstream and downstream business segments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2.591 million. The property and equipment footnote follows. Oil and Processing Gas Transportation Retail and Property, Plant and Equipment (in C$ millions) Properties and Storage Upgrading Refining Other Total Cost Dec. 31, 2017 Additions Acquisitions Transfers from exploration and evaluation Intersegment transfers Changes in asset retirement obligations Disposals and derecognition Exchange adjustments Dec. 31, 2018 Accumulated depletion, depreciation, amortization, and impairment Dec. 31, 2017 Depletion, depreciation, amortization, and impairment Disposals and derecognition Exchange adjustments Dec. 31, 2018 Net book value Dec. 31, 2017 Dec. 31, 2018 Required $38.470 2.465 64 - 79 579 12 $2.391 $8.456 $2.696 $52.092 62 744 151 3.434 - 3 - 67 - - - 79 - - (5) 5 . 43 2 (2) (5) 7 45 (632) - - (10) (1) (643) 362 $40.851 1 = 773 3 1,139 594 $2.451 $9.956 $2.861 $56.213 $(26.016) $(47) (1.811) (2) $(1462) $(3.176) $(1.842) $(32.543) (123) (503) (152) (2.591) 586 (138) - 10 596 $(27.379) (1) = $(50) (264) (1) (404) S(1.585) $(3,933) S(1.995) $(34,942) $12.454 13.472 $32 44 $929 $5.280 $854 $19.549 866 6.023 866 21.271 a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555).
Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The Company operates in Western and Atlantic Canada, the United States and the Asia Pacific Region with upstream and downstream business segments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2.591 million. The property and equipment footnote follows. Oil and Processing Gas Transportation Retail and Property, Plant and Equipment (in C$ millions) Properties and Storage Upgrading Refining Other Total Cost Dec. 31, 2017 Additions Acquisitions Transfers from exploration and evaluation Intersegment transfers Changes in asset retirement obligations Disposals and derecognition Exchange adjustments Dec. 31, 2018 Accumulated depletion, depreciation, amortization, and impairment Dec. 31, 2017 Depletion, depreciation, amortization, and impairment Disposals and derecognition Exchange adjustments Dec. 31, 2018 Net book value Dec. 31, 2017 Dec. 31, 2018 Required $38.470 2.465 64 - 79 579 12 $2.391 $8.456 $2.696 $52.092 62 744 151 3.434 - 3 - 67 - - - 79 - - (5) 5 . 43 2 (2) (5) 7 45 (632) - - (10) (1) (643) 362 $40.851 1 = 773 3 1,139 594 $2.451 $9.956 $2.861 $56.213 $(26.016) $(47) (1.811) (2) $(1462) $(3.176) $(1.842) $(32.543) (123) (503) (152) (2.591) 586 (138) - 10 596 $(27.379) (1) = $(50) (264) (1) (404) S(1.585) $(3,933) S(1.995) $(34,942) $12.454 13.472 $32 44 $929 $5.280 $854 $19.549 866 6.023 866 21.271 a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining." Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Estimating Useful Life, Percent Used Up, and Gain or Loss on Disposal
Husky Energy is one of Canada's largest integrated energy companies. Based in Calgary, Alberta, Husky is publicly traded on the Toronto Stock Exchange. The Company operates in Western and Atlantic Canada, the United States and the Asia Pacific Region with upstream and
downstream business segments. The company uses IFRS to prepare its financial statements. During 2018, the company reported depreciation expense of $2,591 million. The property and equipment footnote follows.
Oil and Processing,
Gas
Transportation
Retail
and
Property, Plant and Equipment (in C$ millions)
Properties and Storage Upgrading Refining Other Total
Cost
Dec. 31, 2017
Additions
Acquisitions
Transfers from exploration and evaluation
Intersegment transfers
$38,470
$79
2,465
12
62
744
$2,391 $8,456 $2,696 $52,092
151
64
-
3
-
3,434
67
79
-
79
-
Changes in asset retirement obligations
43
2
Disposals and derecognition
(632)
-
Exchange adjustments
362
1
=
(5)
5
(2)
(5)
7
45
(10)
(1)
(643)
773
3
1,139
Dec. 31, 2018
$40,851
$94
$2,451
$9,956 $2,861 $56,213
Accumulated depletion, depreciation, amortization, and impairment
Dec. 31, 2017
$(26,016)
$(47)
$(1,462) $(3,176) $(1,842) $(32,543)
Depletion, depreciation, amortization, and impairment
(1,811)
(2)
Disposals and derecognition
Exchange adjustments
Dec. 31, 2018
Net book value
586
(138)
(1)
=
$(27,379)
$(50)
(123) (503) (152) (2,591)
10
596
(264)
(1) (404)
$(1,585) $(3,933) $(1,995) $(34,942)
Dec. 31, 2017
Dec. 31, 2018
Required
$12,454
13,472
$32
44
$929
866
$5,280 $854 $19,549
6,023 866 21,271
a. Compute the average useful life of Husky Energy's depreciable assets in 2018. Assume that land is 10% of "Refining."
Note: Round your answer to one decimal place (for example, enter 6.8 for 6.77555).
7.3
x years
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