- CFA Exams
- CFA Level I Exam
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 26. Long-lived Assets
- Subject 3. Depreciation Methods
CFA Practice Question
Accelerated depreciation methods are less commonly used for financial reporting purposes than straight-line depreciation methods are. True or False?
Correct Answer: True
As cited in the Accounting Trends & Techniques survey (1999), most firms use straight-line depreciation for financial reporting purposes. It is easy to compute and results in the same amount of expense being charged against earnings each year. Accelerated methods are generally used for tax purposes.
User Contributed Comments 1
User | Comment |
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danlan | Accelerated methods are good for tax deduction |