Explain to johnny regarding queries about the concept

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Point 1: You are the chief financial director of Hasson Limited. You have a meeting with the newly appointed independent non-executive director, Johnny, who is an IT expert. Johnny has little knowledge on the annual report.

Point 2: From the annual report, Johnny found that the depreciation expense decreased from $1,400,000 in Year 2016 to $840,000 in 2017 and to $504,000 in 2018. He did not understand why the amount of depreciation expense was decreasing as the company did not have any disposal of assets during those years.

Point 3: Besides, he did not understand why depreciation was still needed when the market price of the company's property had been increased during recent years.

Question 1: Explain to Johnny regarding his queries about the concept and treatment of depreciation

Reference no: EM132467843

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