Fixed Assets UK Tax Depreciation Area
A request has come in from the business in respect of creating a new depreciation area to represent UK Tax Depreciation.
We already have a US tax depreciation area which follows very simple guidlines.
However, for the UK they have the following requirements, (amongst others);
1. An asset could be valid for Tax Depreciation, but not an asset in financial terms. i.e. there would be no asset or depreciation calculated and posted to the General ledger, but for tax purposes there is an asset.
I think there are two potential solutions here;
a. Create a P.O. and assign a General ledger Account / Cost Centre. Receive the product in the normal way therefore posting to the correct Cost Centre / GL Account combination. Then create a Fixed Asset and post Tax Values only to the asset.
b. Create a P.O. and assign an asst number.
For financial purposes fully depreciate the asset at the first month-end, for tax purposes depreciate or not the asset.
However, this would mean that the financial postings would then need to be manually moved to the correct cost G/L account / Cost Centre combination and therefore does not seem sensible.
2. This is the one i have more issues with.
An asset is purchased and has a tax value. At the end of FY 2008, carry-forward is run and 2009 is opened.
At the end of October 2009, the tax accounting department then have the option to post (or not) depreciation in to the prior fiscal year 2008.
To my mind this would require the opening of the fiscal year 2008, then posting of depreciation, and finally the closing of the asset register again.
This seems risky as you could potentially affect the asset financially as well as for tax purposes, (although unlikely).
My question is does anyone actually carry out this function on the SAP Fixed Assets register, and if so, what methods do you use to allow the functrions above?
The answers to the above will affect whether the business purchases a specialised tax asset program, or uses SAP to carry out this function.
Thanks in advance for your assistance regarding the above.