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, Retail

Gas Transportation and

Property, Plant and Equipment $($in C$ millions$)$ Properties and Storage Upgrading Refining Other Total

Cost

Dec. $31,2017$ $$45,997$ $$95$ $$2,859$ $$10,110$ $$3,223$ $$62,284$

Additions $2,46512627441513,434$

Acquisitions $64367$

Transfers from exploration and evaluation $7979$

Intersegment transfers $(5)5-$

Changes in asset retirement obligations $432(2)(5)745$

Disposals and derecognition $(632)(10)(1)(643)$

Exchange adjustments $362177331,139$

Dec. $31,2018$ $$48,378$ $$110$ $$2,919$ $$11,610$ $$3,388$ $$66,405$

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 $(1,811)(2)(123)(503)(152)(2,591)$

Disposals and derecognition $58610596$

Exchange adjustments $(138)(1)(264)(1)(404)$

Dec. $31,2018$ $$(27,379)$ $$(50)$ $$(1,585)$ $$(3,933)$ $$(1,995)$ $$(34,942)$

Net book value

Dec. $31,2017$ $$19,981$ $$48$ $$1,397$ $$6,934$ $$1,381$ $$29,741$

Dec. $31,201820,999601,3347,6771,39331,463$

Required

a$.$ Compute the average useful life of Husky Energy$$s depreciable assets in $2018.$ Assume that land is $10\%$ of $$Refining$.$

Answer rating: 100% (QA)

To compute the average useful life of Husky Energys depreciable assets in 2018 we need to calculate the weighted average of the useful lives of differ... View the full answer