• jaaval@alien.topB
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    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.