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Fixed assets tax regulations

former_member294023
Participant
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Is there anything in place to ensure that SAP has the most current fixed asset tax regulations in place for tax depreciation?  For instance, on 12/19/14 a U.S. government act was passed to extend and increase the first-year deductions for most fixed assets acquired in 2014, and it is retro-active to 1/1/2014.  How is this accounted for in SAP?

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Answers (2)

Answers (2)

Former Member
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Hi Leslie,

The respective regulation from IRS is Reg 1.263. You can read the full text here: http://www.irs.gov/irb/2013-43_IRB/ar05.html

It is effective for taxable years beginning on or after 1/1/14, but tax payers may apply this section for years beginning on or after 1/1/12. The provisions mostly related to the following areas:

1. Cost related to Tangible Assets: How to treat, definition and minimum amount of 'materials and supplies' in capitalization.

2. Capital expenditure: when there is a 'written accounting procedure' and 'applicable financial statement (AFS)' Vs. when there is no such procedures or AFS

3. How to treat 'Routine Maintenance'

4. Amount paid to improve Tangible Property.

5. Capitalization of Betterment.

6. Capitalization of Restorations.

7. Safe harbor rules for the above.

In my understanding most of them can be handled within current functionality. I am not aware of any new OSS in this regard.

Regards,

Unnivel

iklovski
Active Contributor
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Hi,

Not being familiar with the particular act you're speaking about, I can just say that whenever there is a financial regulation, which requires SAP modification of its programs, they usually issue OSS note to stay in compliance with the legislation. Therefore, for all such cases, you should check for presence of such a note at OSS SAP Support portal.

However, sometimes a reaction to this or that legislation should be customisable changes performed by the clients themselves: it all depends on the content.

Regards,


Eli