Does anyone use Units of Production Method for depreciation in semiconductor industry?
This was selected as Best Answer the answer depends on the country which GAAP you are applying. Assuming you are a US company, and would report under US GAAP, you could use units of production methods. However, you have to be careful. Depreciation based on units of production or hours of use should not be used when the units or hours are difficult to forecast or the risk of obsolescence is great. When this form of depreciation is used, the rates should give consideration to obsolescence and to periods of nonuse, such as shutdowns for repairs and maintenance, vacations, and strikes, if these events are reasonably predictable. No depreciation should be provided in these periods of nonuse. However, when casualties, long strikes or other unpredictable events occur that cause an extended period of nonuse, depreciation should be provided during the shutdown period based on a careful assessment of the facts and circumstances. Depending on specific fact pattern, I may be able to assist you fur
