ATMIA survey: 5 years is average ATM depreciation period

July 22, 2003

CAPE TOWN, South Africa -- Following a survey of about 400 members in 19 countries, the ATM Industry Association (ATMIA) has gained a consensus of five years as the international average for the ATM depreciation period.

Replies to the survey came from the United States, Canada, the UK, South Africa and Australia, according to a news release.

Significant points from the feedback include:

  • No one sanctioned a depreciation period beyond eight years
  • The lowest suggested depreciation period was three years
  • A range of five to seven years was commonly accepted
  • The seven-year period was suggested for deposit-taking and multi-functional ATMs
  • 10 to 15 year depreciation periods were regarded as excessive
  • The technology regarded as closest to ATMs for benchmarking its lifespan was the personal computer
  • The average depreciation period has decreased over the past few years from seven years to five years
  • Banks have a longevity requirement for ATMs beyond that of ISOs
  • Competition between manufacturers is spurring innovation which may further lower the ATM depreciation period over time
  • The cost structure of ATMs has come down
  • All makes manufactured after 2000 were depreciated at five years

According to the survey, the four key criteria for determining a correct depreciation policy are: technological obsolescence, based on expected useful life of the machine, model and year of manufacture of machine, speed at which hardware and software developments happen, history of machine's usefulness and durability, timing of refurbishments and timing of replacements; regulatory requirements, especially the relevant tax provisions, and related accounting and auditing policies; length of contract signed with supplier by ATM owner or lessee; and changing cost structure of ATMs.

Some respondents did not think it was possible to be definitive when defining the depreciation period, while others said that the industry had to abide by the tax and auditing requirements for depreciation.


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