Depreciation Policies and Ethics Some companies have depreciation policies that differ substantially from the norm of their industry. For example, Cineplex Odeon depreciated its theater seats, carpets, and related equipment over 27 years, much longer than most of its competitors. Another example is Blockbuster Entertainment, which depreciated the videotapes it rents over 36 months. Others depreciate them over a period as short as 9 months.

Growing companies can increase their current income by depreciating fixed assets over a longer period of time. Sometimes companies lengthen the depreciable lives of their fixed assets when a boost in income is desired. Comment on the ethical implications of choosing an economic life for depreciation purposes, with special reference to the policies of Cineplex Odeon and Blockbuster. Collaborative Learning Exercise