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.

1. To match expense to income
2. To accurately represent the value of your assets in the balance sheet

A monthly depreciation expense report can generate the necessary journal entries for both accumulated depreciation (credit) and depreciation expense (debit) accounts.  The processing will summarize all of the selected assets by general ledger code for a single accounting period.

The columns of this report should include:

1. General Ledger Account
2. Account Description
3. Debit
4. Credit

Here you can see what a version of this report will likely look like:

Some fixed asset software packages will offer a general ledger interface which can automate the monthly upload of the depreciation journal entries.  When this option is not available, a depreciation expense journal entry report can be used to manually enter the information into your general ledger.

If you find the need for any help understanding these reports, please feel free to share any questions that you may have.  You may do so either below in the comments section, or on the questions page.

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.

• A single month
• 3 months or a quarter
• 6 months or half the year
• 12 months or the entire year
• Any number of months to show year-to-date

When constructing an asset acquisition report, the columns of the report should include:

1. Asset Number – unique asset identifier
2. Description
3. General Ledger Code – associated G/L code for this acquisition
4. Acquisition Date  – the date when the asset was acquired
5. Cost – purchase price of the asset

Here you can view a sample asset acquisition report to see what one generally looks like (click the image for a larger, clearer view):

This report is typically run with filtering to select a subset of acquisitions.  It can then be used to review all purchases for a specific period or periods for a given entity.  An example would be, all the purchases in the first quarter for the sales department.

For more information on depreciation reporting, take a look at a few other posts addressing the subject.  Also, if there is anything that you would like more information on, or should you have any questions, please ask us below or on the questions page.

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.

The columns of this report should include:

1. Unique asset identifier and optionally description
2. Date placed in service – the date when depreciation begins
3. Depreciation method – determines the calculation technique used
4. Associated recovery periods – the estimated life in years and months
5. Opening depreciable basis – sometimes referred to as cost or purchase price
6. Additions – new assets acquired during the reporting period(s)
7. Disposals – dispositions during the reporting period(s)
8. Adjusted Basis – opening basis plus additions minus disposals
9. Prior – amount of depreciation calculated from the service date through the previous accounting period
10. Current – amount of depreciation in the current accounting period or periods
11. Total – sum of prior and current numbers

A “roll forward” report is a valuable tool to view the monthly asset activity of your internal book schedule.  It shows your opening balance at the start of the accounting period, monthly transaction and then the closing monthly numbers.  This report can also be run against the tax schedule to show asset activity for an entire calendar year.

If you need any help understanding these reports, please feel free to share any questions that you may have.  You may do so either below in the comments section, or on the questions page.

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.

1. Asset Number – unique asset identifier
2. Description
3. General Ledger Code – associated G/L code for this disposal
4. Department Code – associated department
5. Acquisition Date  – the date when the asset was acquired
6. Cost – purchase price of the asset
7. Disposal Date – the date the asset was disposed
8. Disposal Method – method of disposal (i.e. Sale, Retirement, etc.)
9. Proceeds of Sale – any money received for the disposal
10. Total Depreciation – sum of prior and current depreciation amounts
11. Calculated Gain/Loss – the difference between the cost minus any proceeds and total depreciation

Some disposals such as abandonment and destruction do not include any proceeds.  The company simply gets rid of the asset at the end of its’ useful life.  Other disposals such as a sale and exchange can result in proceeds when removing the asset.  In either case, the calculated gain or loss will show the net effect of the disposals.

This report is typically run with filtering to select a subset of disposals.  It can then be used to review all sales or other types of disposals for a specific period or periods for a given entity.  An example of this would be, all the retirements this year for the New York office.  For more information regarding this type of report, or should you have any questions, feel free to ask below or on our questions page.

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.

The fixed asset depreciation report displays a “snapshot” of your fixed assets as of the end of the selected accounting period.  This means all the numbers presented reflect their true value at the end of the period.  Some people will also refer to this type of report as a Net Book Value report.

Below, you can see a generated sample depreciation detail report: (For a clearer view, just click the image)

The columns of this report should include:

1. Unique asset identifier and optionally description
2. Date placed in service – the date when depreciation begins
3. Depreciation method – determines the calculation technique used
4. Associated recovery periods – the estimated life in years and months
5. Depreciable basis – sometimes referred to as cost or purchase price
6. Prior – amount of depreciation calculated from the service date through the previous accounting period
7. Current – amount of depreciation in the current accounting period or periods
8. Total – sum of prior and current numbers
9. Net Book Value – the difference between the depreciable basis and total depreciation is the remaining balance or NBV (Net Book Value)

A detailed depreciation can be run every month for the internal book schedule to get an accurate picture of the present value of your assets.  This report can also be very useful at year end for the tax schedule.

Should you have any questions, or if you would like to know how fixed asset depreciation reporting can be helpful to you, please feel free to ask us.  You can do so be either commenting in the field below, or by leaving a remark on the questions page.

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.

1. Transfer Date – date of transfer
2. Asset From – asset number of the original asset
3. Asset To – asset number of the new asset
4. Transfer Code – type of transfer
5. Transferred Out -
   1. Cost – purchase price of the asset
   2. Prior – amount of depreciation calculated from the service date through the previous accounting period
   3. Current – amount of depreciation in the current accounting period or periods
6. Transferred In
   1. Cost – purchase price of the asset
   2. Prior – amount of depreciation calculated from the service date through the previous accounting period
   3. Current – amount of depreciation in the current accounting period or periods

The tricky thing about transfers is properly allocating the correct depreciation amount to each side of the transfer.  When a transfer occurs in the middle of a year there is depreciation for both sides of the transfer in that year.  Any prior years would show depreciation in the original location while subsequent years would show depreciation in the new location.

This can sometimes cause confusion when running historical reports.  Make sure that your fixed asset system properly handles both sides of a transfer in all historical, current and future reports.  If you would like any questions answered on this type of reporting, we would be happy to try and assist you.  Please feel free to ask us anything below in the comments or on the questions page.

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.

(Click Image for actual PDF form)

Corporate Alternative Minimum Taxes are calculated in addition to regular taxes.  Companies must then compare the two, and are obligated to pay the higher amount.  The initial reasoning behind the mandated AMT was to prevent wealthy corporations from using too many tax loopholes that could be found in the regular tax system.  Created under the Tax Reform Act of 1986, the AMT has been considered by many to be irrelevant, and a burden to taxpayers.  Still, it serves as a great source of income to the government, and many feel that it would be too costly to repeal it.  So, in the meantime, companies (and many individuals for that matter) are forced to pay it.  Thus, below, we have provided the information you need to know in determining your company’s AMT payments, starting with the IRS stated qualifications for the filing the form.

Generally, companies must file Form 4626 if either of the following apply.

• The corporation’s taxable income or (loss) before the net operating loss (NOL) deduction plus its adjustments and preferences total more than $40,000 or, if smaller, its allowable exemption amount.
• The corporation claims any general business credit, any qualified electric vehicle credit, or the credit for prior year minimum tax.

IMPORTANT NOTE:  If the corporation is a “small corporation” exempt from the AMT (as is explained in detail HERE on  the actual form), do not file Form 4626.

Despite in many ways being outdated, form 4626 is something that many businesses still must file, and all businesses should at least be aware of.  If  you need any help in understanding the form, or if you are uncertain as to whether or not your company is one that must fill it out, feel free to contact us below or on the questions page.  Also, how do you feel about the AMT in general?  Do you hate it and think it should be repealed or amended?  Or do you think it still serves a purpose in thwarting a usage of too many tax loopholes?  Let us know any ideas or issues you have.

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.

source: cityofsouthfield.com

Businesses are allowed to take a special allowance on depreciation for qualified reuse and recycling property.  If you are asking yourself what this means, you are in the right place and will find the information below.  Also below, you will find the guidelines for taking advantage of that special bonus depreciation.

Qualified Reuse and Recycling Property:

1.      Is allowed a 50% Bonus Depreciation that may be claimed on the adjusted basis of Qualified Reuse and Recycling Property acquired and placed in service after 8/31/08.  The original use of the property must begin with the taxpayer after 8/31/08 and the property must be new.

2.      Is Defined as:

• A) Machinery and equipment (not building, real estate, rolling stock or equipment to transport reuse and recyclable materials) that is used exclusively to collect, distribute or recycle qualified reuse and recyclable materials.  Machinery and equipment includes the software necessary to operate the equipment.
• B)  Qualified reuse and recyclable materials are: scrap plastic, glass, textiles, rubber, packaging, metal, fiber and electronic scrap.
• C)  The term “recycle” and “recycling” means the process by which worn or superfluous materials are processed into materials for use in manufacturing consumer and commercial products, including packaging.
• D)  “Electronic scrap” which includes cathode ray tubes, flat panel screens or similar video display devices with screen sizes greater than 4 inches diagonally and central processing units.

3.      Must have original use with taxpayer beginning after 8/31/31.  Property must be acquired after 8/31/08.  If a written contract to purchase, it must be entered into after 8/31/08

4.      Purchased is as defined in Code Sec. 179(d)(2).

5.      Qualified reuse and recycling property must have a useful life of at least 5 years.  This is not the assigned recovery period for this asset.

As you can see, committing to conducting business in a more environmentally safe manner, and finding ways to also save money through the allowable bonus depreciation can be a great new years resolution.  Should you have any questions on this, please do not hesitate to ask us below or on the questions page.  We wish you and your business the best in the upcoming New Year, and hope this information can be of help.

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.