BVX Knowledge Base
BVX Knowledge Base
M&A University

New Fixed Assets Write-Off

Quick Tips:

  • Enter depreciation life of the new fixed assets.
  • BVX depreciates all fixed assets on a straight-line basis (default).


New fixed assets i.e. the fixed assets acquired with capital expenditures after the acquisition are written off on a straight-line basis over the number of years specified in this cell.   Internal Settings permit accelerated or custom depreciation schedule. (See Old Fixed Assets Write-Off for depreciation life of old fixed assets.)


Depreciation life of the old fixed assets and the new fixed assets can be different.  This can be especially true in a Stock purchase, where the remaining depreciation life of the old fixed assets may be shorter than that for the new fixed assets.


Most businesses acquire fixed assets with different depreciation lives.  In such situations one should use the average, or the weighted average, depreciation life for all the new fixed assets.


Longer depreciation life means tax benefits of depreciation are spread over a longer period of time.  Hence businesses with long-life assets will have a lower value, all other things being equal.  The opposite is true for businesses with short-life assets; they will have a higher value, all other things being equal.