Download Depreciation PPT Presentation Slide Decks, Excel Templates, PDFs, & Word Docs




We have categorized 3 documents as Depreciation. All documents are displayed on this page.

What Is Depreciation?

Depreciation is the systematic reduction in the recorded cost of tangible assets over their useful life. Understanding depreciation is crucial for accurate financial reporting and tax strategy. Ignoring it can distort asset valuations and mislead stakeholders about financial health.

Learn More about Depreciation

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.


Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab




Read Customer Testimonials

 
"FlevyPro provides business frameworks from many of the global giants in management consulting that allow you to provide best in class solutions for your clients."

– David Harris, Managing Director at Futures Strategy
 
"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.

The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."

– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.
 
"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.

The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."

– Dennis Gershowitz, Principal at DG Associates
 
"Flevy is our 'go to' resource for management material, at an affordable cost. The Flevy library is comprehensive and the content deep, and typically provides a great foundation for us to further develop and tailor our own service offer."

– Chris McCann, Founder at Resilient.World
 
"I have used Flevy services for a number of years and have never, ever been disappointed. As a matter of fact, David and his team continue, time after time, to impress me with their willingness to assist and in the real sense of the word. I have concluded in fact "

– Roberto Pelliccia, Senior Executive in International Hospitality
 
"I have used FlevyPro for several business applications. It is a great complement to working with expensive consultants. The quality and effectiveness of the tools are of the highest standards."

– Moritz Bernhoerster, Global Sourcing Director at Fortune 500
 
"My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me "

– Bill Branson, Founder at Strategic Business Architects
 
"Last Sunday morning, I was diligently working on an important presentation for a client and found myself in need of additional content and suitable templates for various types of graphics. Flevy.com proved to be a treasure trove for both content and design at a reasonable price, considering the time I "

– M. E., Chief Commercial Officer, International Logistics Service Provider



Depreciation Best Practices & Insights

Consider this observation from Satya Nadella, Microsoft's CEO, who said, "Every piece of technology in our economy, our society, is going through a rapid change. And it's the cumulative effect of that that is changing the texture of business." An essential but often neglected aspect of this change is understanding accounting practices including Depreciation.

Depreciation, at its most fundamental level, refers to the decrease in value of assets over time due to wear and tear, obsolescence, or age. However, for an organization's CFO, it is not so simple—it's more than an accounting entry, it is a strategic business factor.

Depreciation touches areas as diverse as tax planning, budgeting, capital planning, and, hence, it is vital for business leaders to fully understand it. According to Deloitte's CFO Insights series, failure to manage asset depreciation correctly can have a direct impact on a company's bottom line, leading to a potential loss of millions of dollars annually.

For effective implementation, take a look at these Depreciation best practices:

Economic Impact of Depreciation

The latest report from the Bureau of Economic Analysis (BEA), part of the U.S. Department of Commerce, highlighted that the capital consumption adjustment had risen to 2.1% of GDP, most of which can be attributed to Depreciation. This underlines the sheer economic size and importance of managing it correctly.

Impact on Tax Planning

From a tax planning point of view, corporations can leverage various depreciation methods such as straight-line or decreasing balance to minimize taxable profits and hence reduce their tax liability—another reason why overseeing depreciation correctly is so crucial. Failing to do so might mean leaving valuable tax offsets on the table, which could undermine the corporate goal of optimizing shareholder value.

Explore related management topics: Shareholder Value

Best Practices for Depreciation Management

Here are some best practices according to the prestigious McKinsey Group:

  • Accurate Inventory: Keep an accurate inventory of all assets. It will help in estimating costs and planning budgets.
  • Frequent Reconciliation: Carry out frequent reconciliation of physical assets with the accounting records.
  • Appropriate Depreciation Method: Select the most appropriate depreciation method that best reflects how the asset's future economic benefits will be consumed by the entity.
  • Keep an Eye on the Changing Landscape: Laws, regulations and tax rules can change. Keep up-to-date with changes and make adjustments as necessary.

Explore related management topics: Best Practices

Role of Technology in Depreciation Management

The synergy between technology and business strategy is a critical factor in managing depreciation. The insights gleaned from the proper use of technology can enable critical strategic decisions. Advanced software solutions and automated asset management systems can collect, organize, and analyze data on the lifespan, maintenance costs, and depreciation rates of every company asset.

Goldman Sachs's 2020 report on The Future of Finance underscores that companies who harness the power of technology in finance are better placed to streamline processes, including depreciation calculation, to become more cost-efficient in the long run.

Think Strategically About Depreciation

Embracing depreciation calculation as a strategic tool rather than an unavoidable accounting fact allows for better capital planning, strategic decision-making and complements overall Strategic Management. Synchronizing these elements is crucial for C-level executives to maintain corporate health and achieve Sustainable Growth.

As we navigate the rapid change in today's business environment, a comprehensive understanding of depreciation and its strategic application can prove to be a competitive advantage, leading to better financial health and stronger market position in the long run.

Explore related management topics: Competitive Advantage

Depreciation FAQs

Here are our top-ranked questions that relate to Depreciation.

What role does artificial intelligence play in optimizing depreciation schedules for tax benefits and strategic planning?
AI revolutionizes financial management by optimizing depreciation schedules for tax benefits and Strategic Planning, ensuring Operational Excellence, and driving Business Transformation with data-driven insights. [Read full explanation]
How is blockchain technology influencing asset tracking and depreciation management?
Blockchain technology is transforming Asset Tracking and Depreciation Management by enhancing transparency, efficiency, and security, enabling real-time, tamper-proof record-keeping and automating depreciation calculations. [Read full explanation]
How does the integration of ESG (Environmental, Social, and Governance) criteria affect depreciation strategies and asset valuation?
Integrating ESG criteria profoundly impacts depreciation strategies and asset valuation, necessitating reevaluation of asset life, influencing investor perceptions, and requiring robust Strategic Planning and Risk Management. [Read full explanation]
What are the implications of changing international accounting standards on depreciation practices for multinational corporations?
Changing international accounting standards on depreciation impact MNCs' Financial Reporting, Compliance, Strategic Planning, Operational Efficiency, and Global Tax Obligations, necessitating a proactive, strategic management approach. [Read full explanation]

Recommended Documents

Related Case Studies

No case studies related to Depreciation found.

Explore all Flevy Management Case Studies




Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.