The effective management of fixed assets is an increasing challenge. The complexity of calculating depreciation, coupled with tax law changes, merger and acquisition activity, and ERP system and cloud migrations has increased the need for companies to have a clear strategy around the management of fixed asset tax reporting.
PwC can help to analyze the timing of income and deductions, cost capitalization issues, and depreciation calculations - including bonus, leasing, and other accounting method issues, so that companies can evaluate their ability to utilize, change, or adopt advantageous accounting methods and achieve their overall tax objectives.
PwC works with companies to initially classify new fixed assets and update historical fixed asset classifications as well as remediate the effects of under- or over-depreciated assets. Specifically PwC works with companies to properly allocate and classify fixed assets placed in service during the current year as Section 1245 or Section 1250 property (often buildings that have been recently constructed or acquired) as well as deductible Section 162 expenditures, including helping with Section 1060 purchase price allocations. PwC also can help companies with fixed asset planning related to certain international-focused tax provisions.
PwC works with companies to leverage technology in the labor intensive process of maintaining tax basis reconciliations as well as assist companies with remediation of variances in the cumulative tax basis balance sheet.
PwC leverages its fixed asset professionals and proprietary software to (1) help companies accurately track fixed asset depreciation, gain/loss, and book-tax differences for tax reporting purposes and (2) provide an automated interpretation of asset activity and attributes including location and intercompany transactions and reconcile book ledger activity on an asset by asset basis to tax. This technology enabled service offering helps clients maintain consistent reporting for federal and state income tax reporting and has additional benefits related to property tax maintenance and tax basis balance sheet support.
PwC has developed technology that uses location data to unlock tax savings and insights. For example, GPS data and telematic information from a client’s fleet can be utilized to claim fuel tax refunds and automate fleet tax compliance.
PwC works with companies to (1) identify credits and incentives available for qualifying new construction, leasehold improvements, or retrofits, (2) develop tax efficient strategies for investments in alternative and renewable energy to realize the full value of these incentives, and (3) manage risks by assisting companies with the certification requirements and computations to establish sound calculation and documentation methodologies.
PwC works with companies to structure capital expenditures
(i.e. acquisitions, new construction, and renovations) in a manner that qualifies the resulting property as replacement property in a like-kind exchange (LKE).