Question: (a) Comment on the effect of these differing depreciation rates on the profit of Air New Zealand Ltd and Qantas Airways Ltd. (b) Can you

(a) Comment on the effect of these differing depreciation rates on the profit of Air New Zealand Ltd and Qantas Airways Ltd.
(b) Can you suggest any reasons why the choice of useful lives would differ across the entities?
(c) Debate whether you believe entities should have discretion to choose the depreciation method and useful lives applicable to various asset classes.
(d) What do you think would affect the useful lives of assets such as aircraft?

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a Even if the companies had an identical asset purchased on the same date for the same price different useful life estimations by the companies will result in different depreciation expenses being rec... View full answer

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