Archive: Dec 2011

Examining More Depreciation Factors

When formulating a depreciation schedule, a number of factors must be addressed, including basis cost, expensing threshold, partial-year depreciation and salvage value. However, the depreciation considerations don’t end there. When establishing fixed asset accounting policies and procedures, your company also needs to take other eventualities into account, such as disposal/idleness, assets from a lump-sum purchase and the cost of repairs/improvements. Disposal/idleness Once a fixed asset is permanently disposed of, the item and the offsetting depreciation can both be written off. When an asset is only temporarily out of use (idle), depreciation should continue to be claimed as it is not…

Read More

Fixed Asset Management and Your Small Business

Setting up a successful small business is the product of hard work, a great idea and good business sense. However, entrepreneurs may be tripped up by fixed asset management if they don’t have a comprehensive system in place. To make sure this doesn’t happen, small enterprise owners may painstakingly go over the books manually, calculating depreciation schedules and attempting to manage all of the business’ fixed asset holdings by hand. This can be time-consuming, and even the most skilled person can make mistakes. Fixed asset software can help expedite the process and eliminate the risk of human error. Automating asset…

Read More

Choosing Fixed Asset Software Over Spreadsheets

When spreadsheets first came along, they represented a significant improvement over tedious manual fixed asset accounting procedures. However, times have changed and more comprehensive fixed asset management solutions such as specialized asset software have come along that make spreadsheets pale in comparison. Despite the clear advantages associated with upgrading to fixed asset software, some companies have so far elected to stay in the past by using spreadsheets to oversee their asset holdings. Those who make this decision are missing out on a number of advances, including audit trails, security provisions and more sophisticated technology – for example, linking parent/child assets….

Read More

Fixed Assets: To Buy or Not to Buy?

The bonus depreciation provision of the Tax Relief Act of 2010 was introduced to boost the economy in two ways. It created an incentive for businesses to make purchases from manufacturers that produce and sell fixed assets such as computers and machinery, and helped lower companies’ tax bills to stimulate hiring and expansion. Of course, there are rules governing which fixed asset purchases are eligible. These include the following: Items must be placed in service before the deadline of December 31, 2011. Assets previously used by another taxpayer do not qualify, although improvements made by the current owner may. Items…

Read More

Using Fixed Asset Management Software to Track Leased Assets

If your company leases its fixed assets, it’s extremely important to have an adequate fixed asset tracking system in place. Affixing bar code labels to each item helps differentiate between them and allows a comprehensive body of information to be built for every individual asset. As with fixed assets that your company owns and uses itself, the data stored by the asset software should include date of purchase, date of implementation, maintenance history, depreciation schedule and warranty and insurance details. However, additional information should be kept for equipment that’s leased, such as the terms and conditions of the agreement, lease…

Read More