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How do Consulting services like McKenzy calculate their depreciation given they do not have tangible assets...

How do Consulting services like McKenzy calculate their depreciation given they do not have tangible assets to depreciate

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Answer #1

Service companies like McKenzy mostly have intangible assets in their balance sheets. Examples of intangible assets owned by companies like McKenzy are assets like trademarks and copyrights, agreements, client lists, goodwill, proprietary software etc.

The intangible assets owned by such companies can have both finite life as well as infinite lives. In case of intangible assets having finite life the asset is amortized over the useful life of the asset. In cases where the useful life of the asset is indefinite the assets are not amortized. Instead such assets are evaluated periodically and their useful life is determined.

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