GAAP for long-lived assets significantly impedes rate-of-return comparisons across companies unless the firms

Question

Quizplus · Accepted Answer

GAAP for long-lived assets differs by industry and can significantly impact the rate of return calculations. Therefore, comparing companies' rate of return is only useful when they are within the same industry. The other factors listed, such as marketing to the same customers, size, and operating cycles, do not necessarily affect the accounting treatment of long-lived assets and therefore do not affect rate-of-return comparisons as significantly.

GAAP for Long-Lived Assets Significantly Impedes Rate-Of-Return Comparisons Across Companies