Page 17 - FINAL CFA I SLIDES JUNE 2019 DAY 7
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Session Unit 7:
24. Understanding Income Statements
LOS 24.e: Describe general principles of expense recognition, specific expense recognition
applications, and implications of expense recognition choices for financial analysis.
Depreciation Expense Recognition, p52
Example: Straight-line depreciation expense: Littlefield Company recently purchased a machine at a
cost of $12,000. The machine is expected to have a residual value of $2,000 at the end of its useful life
tanties
in five years. Calculate depreciation expense using the straight-line method.
