Interpreting disclosures regarding long-lived assets Exhibit 9.8 presents a partial balance sheet for Hewlett-Packard Company (HP). a creator and manufacturer of computer hardware and software and related services, for its fiscal years ending October 31, 2006 and 2007.
a. HP uses the straight-line method to depreciate its buildings, leasehold improvements, machinery, and equipment. It recognized depreciation expense of $1,922 million during fiscal 2007. Compute the average total life and average age of its depreciable assets during fiscal 2007.
b. Did HP appear to abandon or dispose of any depreciable assets during fiscal 2007? Explain.
c. What is the likely rationale for treating Customer Contracts, Core Technology, Patents, and Product Trademarks as intangibles subject to amortization? Consider each of these four items separately.
d. HP uses the straight-line amortization method for intangibles subject to amortization and recognized $783 million of amortization during fiscal 2007. Compute the average total life and average age of intangibles subject to amortization for fiscal 2007.
e. HP acquired Compaq Computer seven years ago. Why does HP treat the Compaq brand name as an intangible not subject toamortization?

Partial Balance Sheet for Hewlett-Packard Company EXHIBIT 9.8 (all dollar amounts in millions) (Problem 9.35) October 31, 2006 October 31, 2007 Current Assets $48,264 $ 534 $47,402 $ 464 Land... Buildings and Leasehold Improvements 6,044 5,771 Machinery and Equipment Total Land, Buildings, and Equipment 9,903 8,719 $16,411 $15,024 Less Accumulated Depreciation.. Total Land, Buildings, and Equipment-Net. (8,613) $ 7,798 (8,161) $ 6,863 Intangibles Subject to Amortization: Customer Contracts, Customer Lists, and Distribution Agreements....... Developed and Core Technology and Patents . Product Trademarks ... Total Intangibles Subject to Amortization. Less Accumulated Amortization..... $ 3,239 $ 2,586 2,768 1,923 115 103 $ 6,122 (3,465) $ 2,657 $ 4,612 (2.682) $ 1,930 Intangibles Subject to Amortization-Net. Intangibles Not Subject to Amortization: Compaq Brand Name 1,422 1,422 Goodwill ... 21,773 16,853 Tatal Intangibles. $20,205 $25,852 $ 7,647 Other Assets $ 6,649 Tatal Assets $81,981 $88,699