The conceptual framework for financial reporting identifies the qualitative characteristics and foundational principles that make accounting information useful.

For the following situation, indicate:

(a) the name of the foundational principle; and

(b) whether the company is complying with the foundational principle and how you know that this is the case.

Situation:

A&A Company uses the units-of-production method of depreciation, since management thinks this method most accurately reflects the pattern of benefits received from the asset.Many companies that operate in the same industry as A&A Company use the declining balance method.