ACC211_M5Case - Module#5 Case Module#5 Case Johnson Johnson...

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Module #5 Case Module #5 Case Johnson & Johnson in the Financial Statement Analysis Case ACC-211 What was the cost of buildings and building equipment at the end of 2014? The costs at the end of 2014 for buildings and building equipment was $10,046 (in millions). Does Johnson & Johnson use a conservative or liberal method to depreciate its property, plant, and equipment? Johnson & Johnson use the straight-line depreciation method for their property, plant, and equipment. This method is conservative, because of its consistency throughout the years. Accelerated depreciation methods will have higher amounts in early years, resulting in lower net income. As the years go on, the depreciation amount will decrease and the net income will
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Module #5 Case increase, which makes this a liberal method to depreciation. The straight-line method with be the same amount every year throughout the asset’s useful life. This will be a consistent expense deducted from revenues each year, making it a conservative method (Impact of Depreciation Method - Boundless Open Textbook).
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