Asset Inventory Management
The Long and Short of Asset Inventory
In December 2011, the Internal Revenue Service issued guidelines to clarify proposed regulations dating back to 2008 on a range of topics related to tangible property capitalization rules. Among the regulations was the de minimis rule for capitalization of tangible property. While the regulation was to take effect January 2012, the IRS delayed implementation to accommodate a comment period and bring more clarification to the equation. Although delayed, the IRS allowed for voluntary compliance in 2012 and 2013.
We now await the final rules, with expected implementation effective January 1, 2014. One of the more significant impacts to taxpayers will be the de minimis rule for tangible property. In order to determine whether or not you meet the safe harbor requirements, a complete accounting of previously capital expensed assets will now be required. This could expand, significantly, the number of assets included and increase the administrative burden to inventory and track these assets.
Are you ready to take on the time demands of everything, including inventory, involved in the upcoming Tangible Property Capitalization rules? Are you aware of the time-saving benefits of automating the asset inventory process, if you haven’t already taken this step?