The lack of a common depreciation method makes it impossible to compare the performance of companies using different methods.

Question

Quizplus · Accepted Answer

Different depreciation methods can affect the reported earnings and book value of assets, but analysts can adjust for these differences to make meaningful comparisons between companies. Financial statements also include notes that disclose the depreciation methods used, allowing for informed analysis and comparison.

The Lack of a Common Depreciation Method Makes It Impossible