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To: Rink who wrote (195248)	4/27/2006 1:44:11 PM
From: _Jules	Respond to of 275872

To: TGPTNDR who wrote (195212) 4/27/2006 7:46:41 AM From: ixse of 195322 TGP, it is my understanding that depreciation starts the moment volume production starts (not when output starts shipping for revenue). Fab 36 has been in volume production most of Q1 in order to have shipments end of march like has been made public. Hence depreciation of the building should be in the earnings statement for about all of the quarter, and the used equipment for the part of the quarter since it started being used for volume production. This is in line with the quote from Rivet that Petz posted. Depreciation of fab 36 will rise with more equipment being put into production. I don't know about the details either, just think I got the above correctly. Regards, Rink It's been my understanding and exp., and IRS rules, that equipment is depreciated when the equipment is placed in service. Example: Buy a truck, when you register it, it's in service. It matters not if you actually use it. When equipment is connected and ready to use, it's in service. If it's part of a production line, the various pieces may be installed and when power is applied it's in service. With regard to "Real Property", the Fab, it's in service when the authority (Local Building Inspector) issues a permit to occupy, at that point dep. starts. Of course there are different conventions that may be applied regarding timing issues, i.e. mid quarter, mid year etc. Granted, it's been a while! Jules