Unformatted text preview: expense is being thinned and stretched over twenty periods instead of five. Increasing the residual value can be increased if you can receive that much from “scrapping” the asset. Increasing the residual value by 20%, however, is highly unlikely. This also would increase net income as the depreciation would not be as high with an increased residual value. The last two conditions the president gives you cannot be done if you adhere to the GAAP, so as the accountant, I would not change the policies....
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- Fall '07
- Depreciation, Net Income, Generally Accepted Accounting Principles, residual value