For financial reporting purposes, most companies use:

Question

Quizplus · Accepted Answer

Straight-line depreciation is the most commonly used method for financial reporting purposes as it is easy to understand, calculate, and audit. It also provides a systematic and consistent way of matching the cost of an asset with its useful life. Units-of-production and double-declining balance methods are more complex and can result in significant variations in depreciation expenses from year-to-year. Modified accelerated cost recovery system is used for tax purposes and is not relevant for financial reporting.

For Financial Reporting Purposes, Most Companies Use