TLDR: Intel changed depreciation period from 5 to 8 years, creating around 3B per year of paper profits. They did that quietly in the last paragraphs of the ER.
position: none, exited INTC after ER, eating the loss.
Depreciation is an accounting method used to allocate the cost of an asset over its useful life. It is a non-cash expense, meaning it doesn't involve any actual cash outlay, but it reduces a company's reported profits.
Intel, the multinational technology company, is facing criticism for its recent decision to change the depreciation period for its assets from 5 years to 8 years. This change will boost the company's earnings by decreasing the amount of depreciation expense it reports each year.
While Intel may argue that this change aligns with industry standards and is in line with the useful life of its assets, the timing of the move is suspect. The change was announced just as the company was reporting disappointing earnings, and it has the effect of artificially inflating its financial results.
Furthermore, this move raises questions about the company's transparency and integrity. By lengthening the depreciation period, Intel is essentially hiding the true cost of its assets and giving the impression of financial stability and growth that may not be accurate.
Additionally, this move is not only a deceptive accounting practice but also a short-sighted one. By postponing the recognition of costs, the company is delaying necessary investments in its operations and potentially putting its long-term success at risk.
Overall, Intel's decision to change its depreciation period from 5 years to 8 years is a questionable and potentially unethical move that raises concerns about the company's financial reporting and long-term viability.
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