A company purchases equipment for $50,000 and changes its depreciation method after two years. What disclosure is necessary to illustrate this change?

The necessity for disclosing the effect on income from operations, the related per share amounts, and the rationale for the new depreciation method stems from the significance of how such a change can impact the financial statements of the company.

When a company alters its depreciation method, it is making a significant accounting policy change. This change can affect reported earnings, asset valuations, and ultimately, the insights that investors and stakeholders glean from the financial reports. Therefore, it is crucial for the company to provide a detailed disclosure outlining how this change affects its income from operations, as well as how it translates into per share amounts for stakeholders.

Moreover, explaining the rationale behind choosing a new method is vital for transparency, allowing users of the financial statements to understand the reasoning for the change and how it fits into the company's overall financial strategy. This disclosure not only enhances the integrity of the financial statements but also helps maintain investor confidence.

While the other options may touch on different aspects of financial disclosures, they do not comprehensively address the specific implications of a change in depreciation method as required by accounting standards. Therefore, including the income effects and rationale ensures that stakeholders are fully informed about the financial health and strategy of the company.