ACCOUNTING POLICY DISCLOSURE. The Washington Post Company operates in four areas of the media business: newspaper publishing, television broadcasting, magazine publishing, and cable television. Its annual report contains the following note describing its accounting for property, plant, and equipment:

Property, plant and equipment is recorded at cost and includes interest capitalized in connection with major long-term construction projects. Replacements and major improvements are capitalized; maintenance and repairs are charged to operations as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment: 3 to 12 years for machinery and equip- ment, 20 to 50 years for buildings and 5 to 20 years for land improvements. The costs of leasehold improvements are amortized over the lesser of the useful lives or the terms of the respective leases.

REQUIRED:
1. Do you think that the company uses straight-line depreciation in preparing its income tax returns? Explain.
2. Does the statement concerning the capitalization of interest mean that all interest on long-term debt incurred in connection with constructed operating assets is capitalized? Explain.
3. Why are some leasehold improvements amortized over the life of the lease rather than the life of the improvement?