A company must use __________ depreciation methods for their financial statements?

The correct answer is GAAP, which stands for Generally Accepted Accounting Principles. Companies have to use GAAP for their financial statements to ensure consistency, reliability, and comparability in financial reporting. GAAP encompasses a set of rules and standards that dictate how financial transactions and asset valuations, including depreciation, should be recorded and reported.

Using GAAP for depreciation methods helps to provide a clear and standardized approach to determining the useful life and disposal of assets, which is critical for investors, regulators, and other stakeholders who rely on financial statements to assess a company’s financial health. By adhering to GAAP, companies can avoid discrepancies that might arise from varied practices and interpretations of accounting policies.

The other options do not apply universally to financial statements. The IRS refers specifically to tax laws and regulations, which may not align with GAAP principles. Tax methods can include different depreciation practices that do not conform to GAAP standards. Therefore, while a company may adhere to IRS guidelines for tax purposes, they must still follow GAAP for their financial reporting. The term "Conservative" does not specifically refer to an accepted method of depreciation but rather to an accounting approach that might influence various estimates and recognitions, so it lacks the specificity required for this question.