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attempt to combine multiple data ■ Leverage standard system attributes
sources, but many stop there when they to associate fixed assets to companies By elevating your
could be achieving much more. and jurisdictions, including attributes
This item focuses on how to use required to align business units to approach to fixed-
technology to improve fixed-asset tax-filing entities. asset management,
management — that is, the tracking of ■ Leverage standard reports and forms
a business’s assets such as computers, to meet as many fixed-asset–related your company can
gain confidence
motor vehicles, and other objects for data needs as possible, such as provid-
financial accounting, tax accounting, ing support for tax adjustments, that it is effectively
and other purposes. A well-structured earning and profit adjustments, state
capturing every
fixed-asset process increases the ef- apportionment, and personal property
ficiency of data management and tax filings. available economic
manipulation, provides quality control ■ Maintain physical control over fixed
in the form of reduced human error, assets and conduct regular audits to advantage.
and heightens confidence surrounding ensure up-to-date recordkeeping.
tax decisions that can have economic ■ Maintain accurate and up-to-date
benefit. How can you know that your deferred tax asset and liabilities face the major challenge of efficient
company uses the most effective tech- records as well as tax basis balance transformation of fixed-asset data from
nology and processes to optimize fixed- sheets for fixed and intangible assets. the ERP “source” to the software that
asset management? First, you need ■ Periodically check to ensure your manages the tax depreciation.
to be certain the basics are, indeed, system accurately accounts for atypi- Nonetheless, the advent of extraction,
under control. cal transactions such as short periods transformation, and loading (ETL) tools
and other tax reset events such as provides companies with low-code solu-
Fixed-asset fundamentals check-the-box elections. tions that empower the tax department
Remember, assets are assets, so your The basics are all about consistency. to automate many of the data manage-
processes must include all of them — Consistent processes, consistent technol- ment tasks that took many hours or
both fixed and intangible — before ogy approaches, and consistent decisions weeks in the past. Something as routine
you can look at areas of improvement. make it much easier to manage the fixed as properly formatting fields in a spread-
Review your procedures and confirm assets year in and year out while at the sheet or assigning the right recovery pe-
that you: same time remaining flexible to changes riod, method, and convention to an asset
■ Use the same process and technol- introduced by your business operations. can now be automated. In addition, data
ogy approach, for both financial and visualization tools can provide a better
tax accounting, related to identifying Technology solutions understanding of the underlying fixed-
new asset additions, disposals, With the basics handled and your fixed- asset data by creating up-to-the-minute
transfers, write-offs, impairments, asset management processes clear, it is graphical insights. Most of these tools
currency translations, etc. time to look for the opportunity to opti- are intended for those with minimal
■ Capitalize all required costs into the mize using current technology solutions code development training, allowing tax
basis of the asset for both financial and tools. Companies typically fall into staff to create bespoke solutions to their
and tax accounting. one of three categories: fixed-asset challenges.
■ Use standard asset profiles to ensure ■ Those that use their financial
accuracy and consistency — ac- accounting software (enterprise Ready for the next level?
counting controls the book profiles, resource planning, or ERP) for tax With the fundamentals handled and
while the tax group manages the depreciation calculations; your fixed-asset management technol-
associated tax profiles. ■ Those that use tax-centric fixed-asset ogy solutions in place, it is time to look
■ Maintain adequate sets of fixed- software aside from their ERP; and for the opportunity to optimize. By
asset books for all financial and tax ■ Those that maintain a rudimentary elevating your approach to fixed-asset
accounting. (or sometimes complex) spreadsheet management, your company can gain
■ Use a consistent approach for all to track tax depreciation. confidence that it is effectively captur-
companies, even joint ventures The inflexibility inherent in the first ing every available economic advantage.
or other business entities you are category is discussed later in this item. These may include bonus depreciation
responsible for managing. Companies in the latter two categories under Sec. 168(k), Sec. 179 election

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