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9.5 A A recent annual report of H. J. Heinz Com...

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9.5 A A recent annual report of H. J. Heinz Company includes the following note: Depreciation: For financial reporting purposes, depreciation is provided on the straight- line method over the estimated useful lives of the assets, which generally have the following ranges: buildings? 40 years or less; machinery and equipment? 15 years or less; computer software? 3? 7 years; and lease hold improvements? over the life of the lease, not to exceed 15 years. Accel-erated depreciation methods are generally used for income tax purposes. a. Is the company violating the accounting principle of consistency by using different deprecia-tion methods in its financial statements than in its income tax returns? Explain.

 

Paper#8015 | Written in 18-Jul-2015

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