sabre

Hey that question tripped me up too but I realized that the key word in the sentence is ‘accounting reporting’. My rationale was that the depreciation is thus made for tax purposes and it’s not the opportunity cost of using the machine. Hence, it’s not calculated  had it been the economic depreciation it would be taken into account. Note that in question 4 of the Reading 16 the accounting depreciation is not used in calculating the economic profit. Hope that helps. I haven’t yet used Elan though so I don’t know what the questions are and how they compared to the CFA readings.