Which one of the following disclosures is required by generally accepted accounting principles?
A)depreciation expense for each major class of asset
B)balances of major classes of depreciable assets by nature or function
C)accumulated depreciation on each depreciable asset
D)an explanation of why the depreciation method used was selected by management

Question

Quizplus · Accepted Answer

GAAP requires disclosure of balances of major classes of depreciable assets by nature or function in the financial statements as it provides important information to users about a company's asset base and how it is being utilized. While disclosure of depreciation expense and accumulated depreciation are also important, they may not be required by GAAP in all circumstances. The explanation of why the depreciation method was selected by management is not a required disclosure under GAAP, although it may be helpful for users in understanding the company's accounting policies.

Which One of the Following Disclosures Is Required by Generally