Recruiter's Glossary

Examples: Reconciliation • Fixed Assets • Accrual Basis

Depreciation

Term from Accounting industry explained for recruiters

Depreciation is a basic accounting concept that shows how business assets (like equipment, buildings, or vehicles) lose value over time. It's like tracking how a new car becomes less valuable each year. Accountants use depreciation to spread out the cost of expensive items over several years instead of recording the full cost at once. This helps businesses show their financial situation more accurately and can affect their taxes. There are different ways to calculate depreciation, such as "straight-line" (equal amounts each year) or "declining balance" (more in the early years). Understanding depreciation is a key skill for accountants and financial professionals.

Examples in Resumes

Managed Depreciation calculations for a $5M equipment portfolio

Implemented new Depreciation methods that saved the company $100K in tax liability

Created automated Depreciation schedules for 200+ company assets

Typical job title: "Accountants"

Also try searching for:

Staff Accountant Financial Analyst Fixed Asset Accountant Cost Accountant Tax Accountant Corporate Accountant Accounting Manager

Where to Find Accountants

Professional Organizations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you handle a situation where a company needs to change its depreciation method?

Expected Answer: A senior accountant should explain the process of evaluating the impact on financial statements, getting necessary approvals, documenting the change, and ensuring compliance with accounting standards. They should also mention the importance of communicating with stakeholders.

Q: Can you explain how different depreciation methods might impact a company's financial statements?

Expected Answer: The answer should cover how different methods affect profit reporting, tax obligations, and balance sheet values, with examples of when each method might be most appropriate for different business situations.

Mid Level Questions

Q: What are the main depreciation methods and when would you use each one?

Expected Answer: Should be able to explain straight-line, declining balance, and sum-of-years-digits methods in simple terms, with practical examples of when each might be best used.

Q: How do you handle partial year depreciation?

Expected Answer: Should explain how to calculate depreciation for assets purchased mid-year, including different conventions like half-year or mid-month, and why these matter for accounting accuracy.

Junior Level Questions

Q: What is the basic formula for straight-line depreciation?

Expected Answer: Should explain that it's (Asset Cost - Salvage Value) ÷ Useful Life, and be able to work through a simple example.

Q: What information do you need to calculate depreciation?

Expected Answer: Should list the basic elements: asset cost, estimated useful life, salvage value, and be able to explain what each term means in simple language.