Detailed discussion about depreciation

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What is the purpose of depreciation? Does the book value of a fixed asset, cost minus accumulated depreciation, communicate to a user what the asset is worth? Should the financial statements reflect the value of fixed assets?

What are the different methods used to calculate depreciation? How does a company decide which method to use? How does its choice affect the financial statements? Should companies standardize the method of depreciation to enhance comparability?

Reference no: EM1364893

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