Remodel and Refresh Regulations for Restaurant and Retail Accounting

Q and AWe recently received a question from one of our clients:

“There are some new remodel and refresh regulations (Rev. Proc. 2015-56). Do you have any suggestions on how Bassets could handle the depreciation. Remodels and refreshes would be allowed to expense 75% of the Lease Hold Improvement in the first period and the remaining 25% would be allowed bonus depreciation. “

Here is our reply:

Yes, we added a new ITC code “C” for Capitalization Rules. Here is a sample LHI (Lease Hold Improvement) calculation example with the new code:  

  • Cost $1,000.00
  • 75% of $1,000.00 asset cost can be expensed at $750.00
  • 25% of $1,000.00 asset cost can be depreciated @ $250.00
    • Qualified LHI w/ 50% bonus depreciation @ $125.00
    • Qualified LHI w/ Straight Line, Full Month 1st Year Convention over 15 years

T1 Tax Report Columns:

  • Purchase Price = $1,000.00
  • Section 179 = $0.00
  • ITC Amount = $750.00
  • Bonus Depreciation = $125.00
  • Depreciable Basis = $125.00
  • Prior, Current Period, Total Accum and Net Book Value reflect current period depreciation during the life of the asset

The start or effective date for this new feature applies to assets acquired after 01/01/2015. For more information, see this post “Majority of Costs to Remodel or Refresh Retail Stores Are Deductible Under New Safe Harbor” from TheTaxAdvisor.com.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.


Fixed Asset Management Process Flow

The administration and management of fixed assets can be a very complex process. As assets are acquired they need to be entered into software where they can be tracked and depreciated over their useful life. Reports and exports can then be generated to answer any fixed asset or depreciation questions.

There are 5 levels in the chart below to show the flow of processing, from top to bottom they are:

  1. Documents and import files
  2. Input processing
  3. Core fixed asset software
  4. Output processing
  5. Reports and export files

Click on any of the boxes in the chart below to learn more about that specific topic:

Image Map

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

Start Depreciation of Fixed Assets with Construction in Progress

Construction in progress (CIP) tracks all of the invoices in working projects for a company. As these projects are completed, the invoice records can be capitalized (one invoice) or consolidated (multiple invoices) to a fixed asset. The fixed asset record can then start to actively depreciate now that it has been placed in service.

Start Depreciation

Once a project is completed, the sum of all the invoices can be totaled into a fixed asset. Bassets eDepreciation has a very flexible CIP Summarry feature and a multi-invoice browse. This easily allows the user to select a subset of invoices by project number or other criteria. After the invoices in the CIP module have been consolidated they will be tagged with the consolidation date and associated asset number. This allows for easy retrieval of invoice detail to answer any questions or provide audit records.

Here are a few related posts:

Summarize Construction in Progress Invoices

Dynamic Browse

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net. While there you can register for our live webinar, download a free evaluation copy and get a personalized pricing estimate.

Foreign Currency Reporting of Fixed Asset Depreciation

foreign currency reporting 2Companies primarily enter fixed assets in functional currency, which is the currency used for its principal business. So a U.S. based company would enter most of their assets with U.S. dollars. If they own subsidiaries in other countries than those assets can be entered with a different reporting currency. A foreign currency reporting conversion module would then be necessary to report in either functional or reporting currency.

Bassets eDepreciation includes an optional foreign currency module that allows the user to easily generate depreciation reports in different currencies.  The Currency Conversion module enables each individual asset to be stored in the native currency of that country. This flexibility permits reporting of the monthly depreciation expense in appropriate dollar amounts as needed.

When reports are generated, you can select a currency type for the report. For each asset being processed, Bassets eDepreciation will:

  • Find the correct currency type.
  • Determine the year and/or month to get the correct conversion rate for both acquisition and disposal.
  • If the report is being run for the same currency, no conversion is required.
  • If the report is being run for the reporting currency, the numbers will be multiplied by the correct conversion rate.

An integrated foreign currency module greatly reduces the errors that can occur when using a spreadsheet or manually calculating conversions. All standard reports can be run in either functional or reporting currency to display cost, depreciation calculations and net book value using the selected currency.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net. While there you can set up a demonstration, download a free evaluation copy and get a personalized pricing estimate.

Construction in Progress (CIP) with Budget

Corporations and government agencies have to track all of the invoice detail for their construction projects. Managing the costs on these projects requires careful planning and sound budgeting principles. The main purpose of budget management is to estimate the total cost to complete the project and then ensure your team stays within the approved amount.

The CIP module in Bassets eDepreciation enables you to track a group of invoices by project. As the project develops, the user will enter or import additional invoices that are associated with each project. There can be an unlimited number of active projects running concurrently.

The budgeting add-on module enables you to track a budget at the project level for the life of the project. These budget amounts can then be used to run budget vs. actual reports. The budget versus actual report will break and display the appropriate subtotal amounts by each project:

CIP with Budget

This is a simple example of the just three invoices in a small project. The same principals apply to larger project with thousands of invoices and multiple budget levels within the project. The budget report can be run in either Summary or Detail format. Summary reports will not display any invoice level detail, they will only show budget totals by project.

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net. While there you can register for our live webinar, download a free evaluation copy and get a personalized pricing estimate.