Which of the following is a consequence of failing to implement depreciation?

The consequence of failing to implement depreciation is indeed the overstatement of asset values. Depreciation is a method used to allocate the cost of a tangible asset over its useful life, reflecting the wear and tear, obsolescence, or reduction in value as the asset is used over time. Without depreciation, the financial statements would show assets at their original purchase price indefinitely, failing to account for their gradual loss of value.

As a result, assets would appear much more valuable than they actually are, leading to distorted financial reports. This overstatement can mislead stakeholders regarding the financial health of a business, potentially impacting investment decisions and financial planning. It's crucial for businesses to implement depreciation for a more accurate representation of their asset values and financial position.