New regulations affecting virtually all taxpayers will require companies to closely examine how they account for tangible property they acquire, produce, repair, and dispose of. The comprehensive regulations, effective in 2014, will impact many day-to-day property transactions, from the purchase of materials and supplies to the maintenance of your existing property, by providing guidance on when expenses must be capitalized and clarifying definitions for certain items.
To comply with the regulations, you may need to file a method change request for items impacted by the regulations. You may also need to document your capitalization policy if you haven’t already done so. In addition, you may want to revise some of your financial reporting practices in light of the new rules to lessen the administrative burden the new rules could cause on an annual basis. You’ll also want to consider whether your accounting and fixed-asset systems support the tracking and calculation of repair expenses on a go-forward basis.
We can help you make sense of the new rules, working with you to create an implementation plan to efficiently and effectively comply with the new rules and take advantage of any available favorable provisions in the process. We can also help you fine-tune your current practices and accounting systems to simplify compliance and better utilize favorable aspects in the coming years.