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The selection of depreciation methods is a fundamental requirement when determining a new asset class because it directly influences how the value of the asset will be expensed over its useful life. Depreciation methods, such as straight-line or declining balance, affect financial reporting, taxation, and overall asset management. Different asset classes may require different depreciation approaches based on their nature, expected usage, and regulatory requirements. Consequently, establishing the appropriate depreciation method ensures accurate financial representation and compliance with accounting standards.

While the other elements—creation of a reporting structure, definition of service life and maintenance rules, and identification of related asset master data—are important aspects of asset management and reporting, they do not directly affect the fundamental financial implications associated with how an asset is depreciated. Thus, determining an asset class starts with establishing the correct depreciation method as it serves as a basis for financial analysis and planning.