Depreciation Policies in Annual Reports The following is a note accompanying a recent financial statement of International Paper Company: Plant, Properties, and Equipment Plant, properties, and equipment are stated at cost less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The units-of-production method of depreciation is used for major pulp and paper mills, and the straight line method is used for other plants and equipment. Annual straight-line depreciation rates are, for buildings-2 percent to 8percent, and for machinery andequipment-5percent to 33 percent. Instructions a. Are the depreciation methods used in the company's financial statements determined by current income tax laws? If not, who is responsible for selecting these methods? Explain