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Depreciation for Accounting and Tax Purposes

Compliance Key INC - Accounting and Finance Training

Patrick A Haggerty

Overview
Nearly all businesses invest in assets that are used in operating the business. The cost of long lived assets is spread over the useful life of the asset and expensed against revenue for both accounting and tax purposes through a process called depreciation. However, the methods allowed under Generally Accepted Accounting Principles (GAAP) and the methods allowed for tax purposes are quite different. This webinar will cover the various methods of depreciation, which are allowed for tax purposes and which are allowed under GAAP, and why businesses must keep more than one set of books when it comes to accounting for fixed assets.

Why should you attend this webinar?
It is important from a compliance standpoint to understand that the purpose of depreciation from a financial accounting and reporting standpoint differs from the purpose from a tax standpoint. Those differences affect the methods allowable for each purpose and the methods are not compatible. Knowing which methods to use and how to apply those methods is important for assuring compliance in financial reporting and tax return preparation. Public companies can be sanctioned for failing to comply with financial reporting standards and even small businesses can experience difficulties in areas where compliant financial reports are required, such as loan applications. In the tax area, improper methods or errors in applying depreciation can lead to fines and penalties for improper tax computations, disallowance of deductions, or recapture of allowable, but not taken, depreciation as ordinary income upon disposal of the asset. The JCTA tax act enacted major changes to bonus depreciation and Section 179 Expensing. Understanding how those methods interact with and affect tax depreciation is critical.
Areas Covered in the Session:
  • Definitions
  • Factors in computing depreciation
    • Cost, Useful life, Depreciation method, Salvage value
  • Accounting methods
    • Straight line, Units of production, Sum of the years' digits, Declining balance
  • Tax methods
    • MACRS, ACRS, Section 179, Bonus depreciation, Intangible assets
    • Need to know changes to depreciation under the JTCA
  • Other issues
    • AMT, Listed property, Depreciation recapture,
  • In this webinar, you will learn:
  • Which property is depreciable and which costs must be included (capitalized).
  • Application of specific depreciation methods and the information is required to use a particular method
  • Methods for accelerating cost recovery, including bonus depreciation and section 179 first year expensing..
  • How to track and reconcile depreciation expense and book value when more than one method is required.
Who can Benefit:
  • Business owners and executives
  • Controllers
  • Accounting Executives and Managers
  • Cost and Managerial Accountants
  • Financial Accountants
  • Internal Auditors
  • IT Professionals
  • Risk Officers
  • Audit Committee Members
  • Public Accountants
  • Enrolled Agents
  • Tax Professionals
Visit:https://www.compliancekey.us/webinarDetails?industryId=3&webinarid=1239&speakerid=70

Compliance Key INC
717-208-8666

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Location: United States

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