Depreciation Methods

[MountainMedic]

For an accounting class, we are reviewing the 2007 annual report for Starbucks and a question was asked regarding how to identify the depreciation method that is used. I know that there is more than one method, I just don't know how to figure out which method is used by a particular company. Any of you accountants out there have an answer? Thank you in advance for your replies.

 

[OAG]

Read the footnotes to the annual report may help. Or if you have all the numbers calculate each method and see which one hits the depreciation number. Spreadsheets are wonderful.

 

[FinanceDude]

For an accounting class, we are reviewing the 2007 annual report for Starbucks and a question was asked regarding how to identify the depreciation method that is used. I know that there is more than one method, I just don't know how to figure out which method is used by a particular company. Any of you accountants out there have an answer? Thank you in advance for your replies.

It's in the financials, sometimes they even name the method used. usually things like goodwill are amortized over long periods, even decades. For capital expenditures like plants and fixed assets, most companies try to depreciate as much as they can to maximize their bottom line depending on current tax laws.

 

[soupcxan]

I did a quick search on the company's last 10-K and your answer is in there.

 

[saluki9]

Cough cough.... Straight line... cough

 

[FinanceDude]

Cough cough.... Straight line... cough

Or flat line, like the market appears to be........clinically dead.........

 

[BunsGettingFirm]

It's in the financials, sometimes they even name the method used. usually things like goodwill are amortized over long periods, even decades. For capital expenditures like plants and fixed assets, most companies try to depreciate as much as they can to maximize their bottom line depending on current tax laws.

Goodwill can no longer be amortized. It is subject to a yearly impairment review.

Ah, it's after work, and you're bringing up my fav work topic -- accounting. I swear!

 

[FinanceDude]

Goodwill can no longer be amortized. It is subject to a yearly impairment review.

Ah, it's after work, and you're bringing up my fav work topic -- accounting. I swear!

Well, it's been a LONG time since those accounting courses. "Impairment review" sounds ominous, as does "Sarbanes-Oxley".........