Question

What role does ethics play in choosing and applying a depreciation method?what role does ethics play in choosing and applying a depreciation method? ​

Answer 1

Step-by-step explanation:

Ethics demands reasons to be given for changing from one depreciation method to another. There are three depreciation methods that are applicable including double-declining balance technique, unit of production technique, and straight-line technique.

Changing from one depreciation method to another must be done in the best interests of shareholders and reasons for such a change must be disclosed. Therefore, ethics requires a company to reveal the changes in depreciation method and adhere to the accounting principles related to the method used.