Intel forecast fourth-quarter revenue and margins above Wall Street estimates on Thursday, optimistic about a healthy rebound in personal computer sales, improvement in its data center business, and a growing lineup of customers seeking its manufacturing services.
Yeah that depreciation change was just scummy. Suddenly the assets you have are roughly 60% more valuable than the day before making the change? Why not just go with a 10 year depreciation at that point.
Depreciation change I think they made 1 year ago.
Depreciation rate has no such effect on asset value. In practice it only chances which year their huge outgoing cash flow for investments actually shows in their books. The international standard requires them to try to match the estimated lifetime with actual lifetime of the asset.
Incidentally, intel changed some estimates from 5 years to 8 years. If they expect to be using that equipment for 8 years then that makes sense.
Usually companies would prefer faster depreciation but there is an argument to be made that it does benefit them in terms of taxation to have slower depreciation now that they have smaller profits.