Depreciation
Depreciation
Companies depreciate capital expenditures for tax purposes and often make purchase decisions based on the depreciated value of items. Here is how to use this capability in Collective IQ®
The Depreciation feature presents and automatically calculates the declining value of assets over time according to predefined rules which the enterprise selects in accordance with its financial governance.
The depreciation calculation can be configured based on:
- Depreciation period of the device (months), or
- Minimum depreciation percentage the device can reach (%)
Depreciation always considers the start date of the contract to which the device is linked until it reaches the minimum (%) value to which this device can be depreciated.
Sample Concept: Linear Depreciation
In linear depreciation, the asset loses value consistently over time until it reaches a residual minimum value (salvage value).
- Original Price → acquisition cost of the asset.
- Minimum Value → percentage of the initial value that the asset can never lose.
- Months elapsed → asset’s age in months.
- Total time → depreciation period (number of months).
✅ Example
- Original price: $5,000
- Contract start date: August 2025 (or 08/2025)
- Total depreciation period: 20 months
- Minimum value: 20% of the original price → $1,000
If 10 months have passed (June 2026 or 06/2026) since the contract start date, the device will be worth $3,000.
If 21 months have passed (May 2027 or 05/2027) since the contract start date, the device value will be capped at $1,000 (20% of the product value), i.e. the device’s minimum value.
How to Access
CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle
Step by Step
Configure Depreciation
CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle ➝ Configure Depreciation
Associate Depreciation Rules
CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle ➝ Associate Depreciation Rules
Whenever a device of this type is associated with a contract, the calculation will be performed automatically.
Apply Device Value to Contract
CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle ➝ Link Device to Contract
- Link the device to a contract;
- Enter the Unit Price of the device associated with the contract.
View Depreciation
CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle ➝ Manage Device Lifecycle
In this case, “Age in Months“ shows 2 months have passed and the device has depreciated by $400.00, with a “Current Value” of $4,600.
View in “Device Details”
When a device has a Device Details card created and is linked to a contract associated with the Lifecycle, it is possible to view depreciation details directly in Device Details, under the “Depreciation Details” section.
This information can be exported in the “Device Details” and in the Life Cycle:
Path: CIQ ITAM ➝ Menu ➝ Inventory ➝ Lifecycle ➝ Manage Device Lifecycle
Practical Use of Depreciation
- Accurate control of the book value of assets.
- Support in replacement or contract renewal decisions.
- Ensures that all devices follow standardized depreciation rules.
- Transparency in the lifecycle of equipment.
Make Smart Decisions
With depreciation configured, managers can:
- Correctly assess the current value of assets;
- Identify the ideal time for replacement or disposal;
- Plan future investments based on concrete data;
- Ensure accounting and financial compliance within the organization.
