Problem
You have recently been hired as the Controller for a large publicly traded company that has experienced significant operating losses for the past few years, which has caused a sharp decline in the company's stock price.
The company is anticipating purchases of significant property and equipment during the next 12 months. What are your considerations and recommendations on whether to use either straight- line depreciation method or the double-declining-balance depreciation method? In addition, the CFO has requested that all equipment, that generally needs to be replaced every 8-10 years, be depreciated over 20 years. What impact would that have on the Company's financial position? Are there any ethical concerns with this policy? What would you recommend?