In the past year, the ATO has highlighted Fixed Assets (property, plant and equipment) as a TAX RISK!
The ATO has specifically flagged:
- Incorrect application of effective lives,
- Incorrect calculations and
- Accelerated depreciation.
Uniform capital allowances – this is usually a large area of assurance for capital intensive Top 100 taxpayers as they own a high percentage of fixed assets (property, plant and equipment). We are seeing instances of the incorrect application of effective lives, incorrect calculations and accelerated depreciation. We also have concerns with the use of automated software where the outcomes may not be compliant with the law, the incorrect use of project pools, and the incorrect treatment of balancing adjustments on disposals. It is important that there are appropriate internal systems and good governance practices to record assets, and to calculate effective lives and depreciation. We will ask to see the tax fixed asset register and the working papers, and we will also verify original cost and adjustable values for high value assets.
We are seeing instances of the incorrect application of effective lives, incorrect calculations and accelerated depreciation. We also have concerns with the use of automated software where the outcomes may not be compliant with the law, the incorrect use of project pools, and the incorrect treatment of balancing adjustments on disposals.
AssetAccountant™ – saving you from spreadsheets since 2019
Fixed asset depreciation - automated
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From the initial contact with the team at AssetAccountant to the final implementation, we have received prompt and positive responses. The effective support service and continuous improvement makes AssetAccountant a product highly recommended to a wide variety of industries as well as to accounting firms.
Marco Abril - Financial Controller, TPM Builders
