A company buys a costly item of electronic equipment that it expects will have a useful life of eight years, and it depreciates the asset over that period. By the end of the fourth year, the item of equipment is obsolete and the company is no longer using it. It is still in the company’s balance sheet at the rernaining undepreciated one-half of original cost, which the company says (i) is a faithful representation of its circumstances since the company still owns the asset, and (ii) is a reliable measure of the asset. 

Comment on the company’s view.