Category: Legislation and compliance

Fair value accounting’s impact on fixed assets instigates changes

Fixed assets of all kinds have been assessed by their market or "fair" value in the last few decades. It's considered a standard practice in comparison to the other common method of utilizing the historical value of goods. There are many benefits to fair value, in that it allows a more fluid movement of assets as well as a more flexible estimate on the value of a company. Asset accounting software has made many of the associated processes that go with using this value far easier to attain. However, the precise definition of fair value has undergone some scrutiny in…

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Understanding different intangible assets

The variables of tangible fixed assets are well known. There are the materials and supplies used to create products. The machines that develop the raw minerals or parts into the products made by the company are also considered fixed assets, as are any of the consumables that make the equipment work such as fuel and lubricant. The warehouse and land that is owned by the company are properties and thus considered tangible assets as well. Intangible fixed assets, on the other hand, are a different matter entirely. Because they lack physical form, there are varying definitions of what's considered intangible….

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The importance of audit trails

Fixed assets are often a key component in any company's accounting books. Without having accurate information on these critical items, the end result is that businesses fail to adequately assess the value of the company, which can in turn cause mistakes in tax returns. There is a necessity to properly record the acquisition, use and disposal of assets in a firm, as well as any changes in value that can occur in between. Still, there are certain things that a business may feel is perfectly acceptable will turn up red flags by the IRS, triggering an audit. Having a proper…

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Understanding investment property depreciation

For many businesses, the most important fixed assets that they can have are the properties they own. This is especially the case with property management and real estate companies that lease out office space or apartments to others. These holdings require significant upkeep, since they are highly valued by the leaseholders. Properly assessing these spaces are necessary to establish a property owner's income during tax season. This is especially true when it comes time to calculate depreciation that will then be used to make a deduction. While utilizing asset accounting software can help establish these values, it's important to know…

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Small businesses spared from repair regulations

In fixed asset accounting, getting the best value of all the properties a company possesses may mean that methods can and should change on an as-needed basis. However, this method often results in filing extra paperwork for the purpose of staying on an even level with the IRS. That can pose as a challenge for many small businesses, since that requires extra time and more money spent dealing with accounting, all the while increasing the risk of mistakes. That is why recent adjustments on tangible properties have made it easier for companies to make changes to their accounting without having to risk…

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