Standardisation of depreciation

There are at least two very different ways in which depreciation can be calculated and, within reason, organisations are able to choose their own method and their own interpretation of key factors within that method. So, if you want to buy a new file-server costing £100,000, the financial reporting standard (FRS) 15 covers the principles of accounting for tangible fixed assets. This 101-page guideline discusses as many variants as you can imagine on how an accountant can work out how much such an asset may have cost, yet doesn’t set clear guidelines on the length of the period over which it should be depreciated. And neither should it. The point is that finance and accountancy is not a science. It’s an art and the only answer you can guarantee you will get from an accountant is ‘It depends’!

Have you identified financial data or financial information? It’s actually a bit of both. Internally financial data is the raw data going into your accounting system. When using external ‘information’ it’s really ‘data’ until you do something with it.