You have been hired by a high-growth startup company to assist in the determination of what depreciation method to employ for financial accounting reporting. The companys fixed assets are equally divided among high-tech equipment (heavily used in the initial years).

1. Can the company select different methods of depreciation for financial reporting and what methods can be used for financial reporting purposes?

2. Explain to management what difference it makes on the companys financial statements (comment on all financial statements affected by depreciation) which method of depreciation is used.

3. Which method(s) of depreciation would you recommend and why?