Sage Fixed Assets Management

One of the largest capital investments many companies have is their investment in their property, plant, and equipment account. So when it comes to managing your company’s fixed assets, you want to be sure you are doing it correctly.

Mismanagement can prove costly. There is the risk of missed opportunities for lucrative tax deductions, as well as the possibility of IRS penalties and interest’s being assessed. In addition, it can cause you to have to restate your financial statements. You can avoid all this, but it takes a bit of planning and a fundamental knowledge of fixed assets management.

When managing fixed assets, you have two concerns: You must follow Generally Accepted Accounting Principles (GAAP) for financial statement reporting, and you must follow the IRS tax codes and regulations for income tax reporting. Each has its own set of rules and requirements.

This e-book will explain the differences between GAAP principles and IRS regulations for fixed assets management. Although there are many more intricacies when it comes to income tax reporting, once you’ve mastered the basics, you will see that by following some basic best practices for fixed assets management, it is possible to do it well.

Income tax reporting is more complex than GAAP reporting because the IRS has many more specific rules about what you can and cannot do. GAAP requires the matching of income and expenses based on what makes the most economic sense, while the IRS requires that you follow the very detailed IRS code and its regulations. To be compliant with both, therefore, you need to know what the rules and regulations are. What complicates income tax reporting even more, however, is that you have to keep different tax books for depreciating assets for different tax purposes. There are rules for regular tax reporting purposes, for Alternative Minimum Tax (AMT) and Adjusted Current Earnings (ACE), and even different requirements when calculating Earnings and Profits (E&P). In addition, you need to maintain a depreciation book for GAAP purposes. Add to this the various state income tax reporting rules, which may differ by state, and it becomes even more difficult, especially when a business is operating in several states.

This e-book will give you a sufficient understanding of where to start and what you need to consider for effective fixed assets management. It will also provide you with a helpful list of best practices to follow.

Courtesy of Sage