Use Microsoft's report to practice the objective. Try the simpler diagnostic if you need help identifying where the work becomes difficult.
These optional questions are not submitted. The written answers provide feedback; their rubric points do not add course gradebook points.
Open the filing source packet for complete reports, downloads, and selected extracts. Start with the full report when practicing navigation.
Objective 1.5
Interpret reported financial information using relevant context from the company's public filings.
Apply the objective: Connect disclosures to a draft conclusion
A draft analysis states: "Microsoft reported $22.0 billion of depreciation
expense for fiscal 2025, and every computer had six years of useful life
remaining at year-end."
These summaries come from Microsoft's 2025 annual report:
Note 1 describes straight-line depreciation and a general estimated useful-life range of two to six years for computer equipment.
Note 6 reports depreciation expense of $22.0 billion for fiscal 2025.
Note 6 reports accumulated depreciation of $93,653 million at June 30, 2025.
Separate the two assertions in the draft. For each passage, identify which
assertion it can inform and what it leaves unanswered. Name the missing
individual asset facts. You do not need to write a final conclusion about the
complete draft.
Compare your reasoning with the worked answer
The draft combines an annual expense amount with a conclusion about every
computer's remaining life. Passage 2 supplies the expense amount and period.
Passage 3 reports a balance at a date; it cannot substitute for annual expense.
Passage 1 describes the depreciation method and general useful-life range.
It bears on the life assertion, but it gives neither individual asset ages nor
remaining-life estimates. Those facts would require individual asset records.
Simpler diagnostic: Locate depreciation expense
Search Microsoft's 2025 annual report
for Microsoft Corporation and its subsidiaries. Work inside the financial
statements and accompanying notes.
Record both locations before reviewing the supplied answer.
Find depreciation expense for fiscal 2024 in the 2025 annual report. Then
find the accounting policy that explains how Microsoft depreciates property
and equipment. Give a location for each finding and explain how the policy
relates to the expense. Distinguish the expense from accumulated depreciation.
Compare your reasoning with the worked answer
Note 6, Property and Equipment, reports depreciation expense of $15.2 billion
for fiscal 2024. The paragraph follows the property and equipment table.
Accumulated depreciation in that table is a balance at June 30; it is not the
expense for the year.
Note 1, Accounting Policies, under Property and Equipment, describes
straight-line depreciation over the shorter of estimated useful life or lease
term. The method explains how the company spreads depreciable cost over time.
The amount for one year must still be found in Note 6.