This is a picture of the old chimney flashing, There is some rot below this chimney because it is possibly leaked over the years.

The chimney is missing step flashing, This is a problem because it protects water from coming in and leaking into the house. There is signs of rot below the chimney because the wood is rotten there. What you see is counter flashing it is not step flashing. Step flashing keeps the water from coming into the home counter flashing covers over the step flashing.