Module VI· Capex & Depreciation ScheduleIntermediate
Question

How do you model depreciation from useful life and asset pool?

Answer

Separate existing asset depreciation and new capex depreciation. Existing assets can depreciate based on remaining useful life or historical D&A. New capex is depreciated over useful life, often with half-year convention in the first year. Sum depreciation from each asset vintage or asset pool and link to the income statement and PP&E roll-forward.