Check your answer
Write your response and explain your reasoning.
Review Microsoft's 2025 annual report. The reporting entity for the financial statements is Microsoft Corporation and its subsidiaries. Consider each description before you inspect the worked answer.
Read Note 6, Property and Equipment, and the property and equipment policy in Note 1. For each description below, explain what the disclosures establish. Correct any error and identify any conclusion that requires more evidence.
- Microsoft reported depreciation expense of $15.2 billion for fiscal 2024.
- Microsoft's depreciation expense for fiscal 2025 was $93,653 million.
- Every computer Microsoft owned at June 30, 2025, had six years of useful life remaining.
Identify the controlling passage and explain your reason. When the disclosures do not settle an issue, name the additional evidence needed.
Compare your reasoning with the worked answer
Note 6 confirms fiscal 2024 depreciation expense as $15.2 billion.
The fiscal 2025 description is incorrect. Note 6 reports $93,653 million of accumulated depreciation at June 30, 2025. Its annual expense paragraph reports $22.0 billion for fiscal 2025. A balance accumulated over time differs from one year's expense.
Note 1 does not establish that every computer had six years of remaining life. It gives computer equipment a general estimated useful-life range of two to six years. It does not identify every computer's age, original estimate, or remaining life at year-end. Individual asset records and current useful-life estimates would be needed to reach that conclusion.