Tangible assets that are attached to natural resources are depreciated over
A)the life of the natural resource
B)the shorter of the tangible asset's life or the natural resource's life
C)the life of the tangible asset
D)the longer of the tangible asset's life or the natural resource's life

Question

Quizplus · Accepted Answer

Tangible assets that are attached to natural resources are depreciated over the shorter of the tangible asset's life or the natural resource's life. This is because when the natural resource is depleted, the tangible asset may no longer have any value. Therefore, it is more appropriate to base the depreciation on the shorter of the two lives.

Tangible Assets That Are Attached to Natural Resources Are Depreciated