In: Accounting
Access the 10-K report filed on September 11, 2019, for the fiscal year ended June 30, 2019. There are many ways to access a 10-K report. One way is through the website for the Securities and Exchange Commission (sec.gov). Select "FILINGS" and then pull-down menu select "Company Filing Search." When the search box appears type in FARMER BROTHERS. You will be taken to a page detailing all the filings; type 10-K in the "filing type" filter box at the top of the page, and the filings will be resorted so that the 10-K filings are at the head of the listing. Open the "documents" for the filing submitted on 2019-09-11 and then select 10-K.
Scan the 10-K filing submitted by Farmer Brothers for the fiscal year ended June 30, 2019, to become familiar with the contents and the way in which the 10-K is organized. Then respond to the following questions. Your responses should be concise.
Solution:
3a. Farmer Brothers using Straight-Line Method to depreciate Property, Plant and Equipment in its 10-K filing report.
3b. Farmer Brothers assign following useful lives to their depreciable assets as per 10-K report:
3c.
Normally Property, Plant and Equipment includes tangible assets not intangible assets but in this case Software is being treated as depreciable asset. A tangible asset that meet criteria of Property, Plant and Equipment will be considered as Property, Plant and Equipment. Following are the criteria:
· They (assets) should have estimated useful lives of 2 years or more.
· They are not intended to sale in ordinary course of business.
· They are being acquired or constructed or developed or internal use or or use by entity itself.
When a software fulfil all above criteria then it will be considered as Property, Plant and Equipment.
Here, it seems like this software fulfils all criteria to be considered in Property, Plant and Equipment definition, like Internal Software.