Comparative Analysis Of The Impact Of Depreciation Methods On The Financial Performance Of Manufacturing Companies. (A Study Of Unilever Nigeria Plc Aba, Abia State)

ABSTRACT

The priority of financial managers is to ethically manage the company br profitability and long-term growth. Companies have policies and practices that align management of the companies with the interest of their shareholders. According to Osunkeye (2008), this brings about beneficial relationship in the long-term. He believes that good corporate governance is a critical factor in achieving business success. Financial managers, who are not bully aware of these responsibilities to shareholders, are therefore not working to achieve the best implementation of depreciation methods and good corporate governance. Furthermore, it has observed that many companies in Nigeria use straight line method of depreciation. According to Achebe (2011) leases in which significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Payments made under operating leases are charged to profit and loss account on a straight-line basis over the period of the lease. This therefore shows that for property, plant and equipment, the carried  value of such fixed assets, the depreciation is calculated to write-off the costs/valuation of the fixed assets on a straight-line basis over the expected useful lives of the assets.