Companies are allowed to use different depreciation methods so they can capture declining service potential of an operating asset.

Question

Quizplus · Accepted Answer

Companies are allowed to use different depreciation methods to better match the declining service potential of an operating asset. Different industries and types of assets may require different depreciation methods, such as straight-line, double-declining balance, or units-of-production. The goal is to accurately reflect the decrease in value and usefulness of the asset over time.

Companies Are Allowed to Use Different Depreciation Methods So They