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3.1.5. Financial Notes and Supplementary Schedules ounting standards require that the cost of the equipment be reported as an expense by allocating its cost less any residual value in a systematic manner over the equipment’s useful life. This allocation of the cost is known as depreciation . <span>Accounting standards permit flexibility, however, in determining the manner in which each year’s expense is determined. Two companies may acquire similar equipment but use different methods and assumptions to record the expense over time. An analyst’s ability to compare the companies’ performance is hin
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