Final answer:
Companies are not required to use the same depreciation method for financial accounting and federal income tax reporting. They have flexibility in selecting different methods based on the guidelines of each.
Step-by-step explanation:
The statement is false. Companies have the flexibility to use different depreciation methods for financial accounting and federal income tax reporting. Financial accounting follows Generally Accepted Accounting Principles (GAAP), which allows companies to select a depreciation method that best reflects the economic consumption of an asset over its useful life. Common depreciation methods in financial accounting include straight-line, double-declining balance, and units-of-production. On the other hand, federal income tax reporting follows the tax code's guidelines, which may require specific depreciation methods or have different rules for certain assets. For example, the Modified Accelerated Cost Recovery System (MACRS) is commonly used for tax purposes, which has predefined depreciation rates for various assets.