If a company uses the same depreciation method as other firms in the same industry, investors will have enhanced comparability of the financial reporting results.

Question

Quizplus · Accepted Answer

If a company uses the same depreciation method as other firms in the same industry, it will be easier for investors to compare the financial reporting results of different companies. This is because the depreciation method affects the reported net income, assets, and liabilities, and using the same method will eliminate any distortions or inconsistencies that could arise from different methods. Therefore, enhanced comparability of financial reporting results is a benefit of using the same depreciation method as peers in the industry.

If a Company Uses the Same Depreciation Method as Other