This case study examines the application of AASB 16, focusing on its implications for property, plant, and equipment, using the Sea Eagles Ltd. as a real-world example. The analysis centers on the accounting treatment of depreciation during a strike, exploring whether depreciation expenses should be recognized when the assets are not in use. The study delves into the relevant guidelines of AASB 16, particularly paragraphs that address the estimation of an asset's useful life and expected usage. The discussion includes an auditing team's perspective and the appropriateness of the unit production depreciation method during periods of inactivity, providing a comprehensive understanding of the standard's impact on financial reporting. The document provides a thorough exploration of the accounting principles involved, supported by references to academic journals and books.