Abstract
For a manufacturing firm, choice of depreciation methods affects not only its distributable income accounts but also its finance for a long time. This suggests that a firm's choice of depreciation methods is closely related with its long-range management planning. The criteria for choosing depreciation methods proposed in this study are based on the long-range management planning and its goal. These criteria are functions of productivity, growth rates, financial cost, and useful life of assets concerned. As a result of comparison between every firm's criterion function value and its depreciation method chosen, it is statistically proved that a firm actually chooses its depreciation method based on its long-range management planning.
