Group depreciation is supported for Capital Asset Planning

Description

Group depreciation in Corporate Performance Management (CPM) software ensures that capital assets, such as equipment and vehicles, are automatically depreciated as a group over a set timeline based on their categorization. This feature simplifies the process of calculating and planning for the depreciating value of like-assets.

Example Use Case

Scenario: An enterprise-level construction company uses CPM software to manage its capital assets which include a large fleet of machinery and vehicles. These assets are categorized into groups such as Heavy Machinery, Light Vehicles, and Site Equipment.

Solution: Group depreciation feature allows the company to automatically calculate depreciation for each group based on pre-determined rates and periods. For example, Heavy Machinery can be set to depreciate over 10 years, while Light Vehicles might depreciate over 5 years. The resulting data helps the company to accurately forecast budget needs and schedule timely replacements or upgrades.

Considerations

A single depreciation method is applied to the entire group of assets. For example, instead of listing each Ford F-150 individually, list all 20 in the Capital Asset Planning tool. Once done, apply a method and allow the CPM tool to calculate depreciation for all of them at once.

This could work by simply dragging the method across several cells (each row representing a truck), or entering a quantity of 20 trucks once, and applying to that.

Questions to Ask a Vendor

• Grouping Flexibility: How easy is it to create and manage asset groups for depreciation in your system? Do we enter them each individually then apply a method to all, or add an amount of units once and apply to that as a group?
• Depreciation Methodology: Can we apply any method of depreciation to the group?