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US Tax - Fixed Assets Management

I would like to know how many of you use SAP system to manage FA for US tax purposes.

As a big int`l company we`re manage most of FA transaction for book in SAP. However, due to always changing US tax law the three areas those we`re struggling with are:

1. Switching between Mid-Qtr, Mid-Month conventions and regular depreciation.

2. Luxury Auto since the depreciation factor changes from year to year

3. The difference between system depreciation based on fiscal year comparing to depreciation tables (which are based on calendar year).

Iu2019d like you to share your experience in using SAP for managing fixed assets for US tax proposes.



Edited by: TDL on Mar 25, 2009 3:38 PM

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  • Posted on Mar 25, 2009 at 04:09 PM

    From a US perspective virtually all SAP customers use FI-AA to manage their tax values. Probably half of the issues, concerns, questions, pain points, etc. come from the tax area which proves that customers are very active in utilizing this.

    That said, there are many customers that have been tracking the values (areas 10, 11, 12, etc.) but not productively using them. These customers tend to use SAP and FI-AA without any issues for many years but for a variety of reasons not related to SAP (usually related to bad experiences from the original implementation) the tax group will download data from area 01 and do their reporting offline. This is clearly a sub-optimal process. I have not yet seen an IRS regulation that can't be met in SAP. Mid-Year, Mid-quarter, luxury auto, capitalized interest, tax depreciation, etc. can all be done relatively easily

    1. Each of these conventions can be handled. It is customary to have different classes (such as Land) use different conventions and change between them at appropriate times in the year.

    2. This is just a matter of defining the depreciation key appropriately.

    3. SAP doesn't depreciate based on rate tables... it's more systematic. In the case of Federal MACRS Tax depreciation, SAP follows the same rules that the IRS requires and derives the appropriate rates.


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