There has been a lot of buzz out in the hotel industry lately. Everyone is wanting to renovate in order to capture more occupancy during this economy – but cash flow can, at often times, be unavailable for renovations.  This is where Cost Segregation or Section 179(d) Energy studies come into play. 

More often than not fixed assets are misclassified with a longer depreciation life on a slow depreciation calculation.  About 8 times out of 10 line items are bulked instead of separated out or classified properly –  classified as Real property instead of Personal.  There are many benefits to classifying what goes into your renovations properly: an accelerated depreciation schedule = additional year-end deductions = more money in your piggy bank = additional renovations or keeping staff. 

Should you have questions about Cost Segregation Studies, Tax Engineered Studies or Section 179(d) Energy studies, as always do feel free to reach out to us.  We love hospitality!

P.S.  When you gut rooms, banquet halls, reception areas, restaurants, or other amenities for renovation – remember, they are fixed assets too… run them through disposal!  Otherwise, its money in the trash.

A past client of ours called and wanted to take an existing asset and mark it held for sale, but stop depreciation.  It has been listed but not sold, but when it does sell he wants to have Sage FAS calculate the gain loss.  He can do  of the following – whichever makes the most sense for the actual asset:

1.       Dispose, mark as sold, enter $1 for sale proceeds, and enter a note in the notes tab pending sale.  Once sold come back to disposal tab, change the proceeds (CAN YOU DO THAT) and update with the actual value received for sale. 

2.      Do the same as above, but reset depreciation so you can update the cost of sales and re-dispose.

3.      Process as a transfer, and change the transferred asset depreciation method to NO.  then tweak it out as disposal once sold.

4.      You can utilize a field in FAS to mark as “Sold/Pending Sale” – make the asset inactive until the sale goes through.  Then he can make the adjustment(s) manually as necessary.  Then when he processes the next period of depreciation, FAS will catch up the depreciation calculation.

Written by both: Scott Swarts and Angie Bolton-Lyons

Big Changes Proposed for Revenue Recognition.

This is a very basic / generic link. Great if there is not an actual ‘seamless’ general ledger link available between Sage FAS and your financial system.  This link exports depreciation transactions out from ONE FAS Company at a time, or ONE Group within a company.  These transactions are then exported in ASCII (flat file) that can then be uploaded / imported into your general ledger.

• Summary Journal Entry: Includes only the total amounts for each expense account
• Detail Journal Entry: Includes the expense amount for each asset. Each line of the journal

The cost of the Universal link for Sage FAS is a whopping (one time) $99.

There have been over 140 banks that have fallen through the FDIC in 2009 and another 86 to date already in (since June 28th) 2010.

When other operating banks purchase a fallen bank through the FDIC and assume all of their deposits through a Loss Share Agreement, banks have the option of getting a second opinion of how the slashed purchase price was allocated (intangible versus tangible assets).  While the purchase price for fixed assets is established by the FDIC’s appraisers, the buyer should have an independent valuation performed by experts that do not work for the FDIC to maximize future cash flows.

Compliance with stringent financial reporting requirements, coupled with more demanding regulations resulting from record-setting bank failures, presents valuation challenges at a completely different level!  Below are some objectives to consider PRIOR to or AFTER purchasing a fallen bank.

Objectives for Valuation and Allocation of Purchase Price Services

• Third Party Independent Experts are required to determine the Fair Value of all acquired assets for compliance with provisions of the Purchase and Assumption Agreement between the FDIC and the acquiring bank, SFAS Statements No. 141 & 141R, 157, and AICPA Statement of Position (SOP)03-3, Accounting for Certain Loans or Debt Securities acquired in a transfer.
• Optimize future tax benefits for buyers by providing the basis for maximizing future cash flow resulting from income tax depreciation of Section 1245 (personal) and Section 1250 (real) property based upon proper classification and allocation of value.
• Determine Fair Value of the Loan Portfolio to establish the proper payment by the FDIC for projected settlement losses, outside associated consulting, and audit fees, and internal administrative costs under the Loss Share Agreement.
• Establish a supportable cost basis for future Mark-to-Market valuations required by audit standards.

If you need additional information about this subject or who to contact for an expert opinion or independent study, call us (877) 824-6834 or shoot me an email.

For the complete list of failed banks, log onto: http://www.fdic.gov/bank/individual/failed/banklist.html

FAQ About Sage FAS Asset Inventory – I see a trend.

I’m getting the question about how to use the Sage FAS Asset Inventory solution to track software licenses within an organization. Although there are many free “sniffer” solutions out there that will go out and obtain each users software licenses, sometimes, that’s not enough.

You can utilize the Sage FAS Asset Inventory solution in two ways:

1. Create a new ‘company’ called Software License.  You can rename all the fields that are available in Asset Inventory (yes, even the ones that are already named out of the box).  You can name them: operating system; office version; accounting software; etc.  Then you can create drop-down choices in the SmartList (aka: drop down) to incorporate versions, types, etc.  Other fields you can track information on are the obvious: Registration Codes, Serial Numbers, Purchase Dates, Renewal Dates, Warranty Dates.  FAS Asset Inventory also allows you to upload and attached images to your assets/line items.  So if you wanted to scan in your warranty docs, purchase orders, shipping slips, etc. you can!
2. Implement software tracking INSIDE your current FAS company.  Instead of keeping your software licenses separated, you can implement this same scenario within the same company structure that your Asset Accounting users are utilizing.  The largest BENEFIT of this is to keep ONE record of the workstation in ONE place.  Which drastically improves communication between departments AND the balance sheet.  Which IT Departments may not care too much about, but Accounting sure does!  Difference – you may be limited to the number of user fields.  FAS Asset Inventory has 10 ADDITIONAL fields that do not carry over to the Asset Accounting interface.

The Sage FAS solutions have many different ways you can slice and dice.  So, think outside the box when considering inventory and depreciation solutions — better yet, let me help you: Angie (877) 824-6834.  Let’s chat!

Informational article about Section 179 extended - Rev. Proc. 2010-24 

This revenue procedure modifies the inflation adjusted amounts in Rev. Proc. 2009-50, 2009-45 I.R.B. 617, that apply to taxpayers who elect to expense certain depreciable assets under § 179 of the Internal Revenue Code. This modification reflects statutory changes enacted subsequent to the publication of Rev. Proc. 2009-50. 

26 CFR 601.602 Tax Forms 

NOTE: from IRS 

 

Paragon Systems teams with Dresser & Associates to help wholesale beverage distributors gain control of fixed assets, HR and payroll costs.

Chicago, IL and Scarborough, ME – MAY 18, 2010 - Two leading Sage Business Partners, Paragon Systems and Dresser & Associates, have formed a strategic alliance focused on the fixed asset, payroll, and human resource management needs of wholesale beverage distributors. Paragon Systems (www.FixedAssetExperts.com), a Sage FAS software provider, helps companies reduce tax liability and increase cash flow through effective fixed asset management. Dresser & Associates (http://www.dresserassociates.com/), a Sage Abra HRMS provider, provides human resource (HR) and payroll management systems that improve workforce productivity. By working together, the Sage Authorized Partners will combine complementary resources, technology, and industry experience to provide wholesale beverage distributors with greater control of their businesses and a significant reduction in operating costs.

Angie Bolton-Lyons of Paragon Systems explains that both firms share a client focused philosophy as well as extensive experience with wholesale beverage distributors. “Our clients tell us they feel confident working with Paragon and Dresser because they don’t have to explain how the beverage industry works – we speak their language and are like an extension of their staff. That experience provides us with tremendous momentum in helping our clients to cut costs and improve financial control in a short period of time.”

Jeff Byrnes of Dresser & Associates notes that beverage distributors often outsource HR, payroll and fixed asset management without giving it a second thought. “Our clients are rethinking that strategy once they discover all the hidden costs of outsourcing. By bringing fixed asset, HR, and payroll management in-house, beverage distributors are seeing enormous cost savings for so many things – property taxes, insurance, payroll, administrative overhead, and regulatory compliance.” Byrnes adds, “Once we’re able to sit down with a beverage distributor and calculate the return on investment, it’s an easy decision for them.”

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“Crazy About Your Assets,” authored by asset accounting expert Angie Bolton‐Lyons, informs and entertains …in plain English

Chicago, IL – May 6, 2010 – Upon approaching its one year anniversary, “Crazy About Your Assets,” a blog published by fixed asset accounting consultancy and Sage FAS Fixed Asset software provider Paragon Systems (www.fixedassetexperts.com), has achieved tremendous success and fantastic feedback from its many new and returning readers. Written and edited by fixed asset accounting expert Angie Bolton‐Lyons of Paragon Systems, Crazy About Your Assets addresses common fixed asset management issues, delivers insider tips for using Sage FAS Fixed Asset software, provides updates on fixed asset legislation and depreciation rules, and shares personal experiences of the author while working in the field. 

[ FULL STORY ]

Peggy is asking... where is my cold drink?

We are having so much fun reviewing and chatin’ about fixed assets…
we are extending OUR Cinco de Mayo through the weekend! 

Arriba! Arriba!