The board of directors of Park Place Porsche is having a quarterly meeting. Accounting policies are on the agenda, and depreciation is being discussed. A new board member, an attorney, has some strong opinions about two aspects of depreciation policy. Jennifer Axelrod argues that depreciation must be coupled with a fund to replace company assets. Otherwise, there is no way to guarantee the replacement of worn-out assets, she argues. Axelrod also challenges the 3 -year depreciable life of company computers. She states that the computers will last much longer and should be depreciated over at least 5 years.

Requirement 

Write a memo to explain the concept of depreciation to Axelrod and to answer her arguments. Format your memo as follows: 

Transcribed Image Text:

To: From: Subject: MEMO