Information about the Economic Stimulus Act of 2008 and how Fixed Assets can handle bonus depreciation in Microsoft Dynamics GP

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INTRODUCTION

This document provides information about how Microsoft Dynamics GP handles the Economic Stimulus Act of 2008 (Public Law 110-185). The 2008 bonus depreciation deduction is a deduction allowed in the tax year that the qualified property is put in service. It provides a 50% bonus depreciation deduction for certain property obtained or constructed, and put in service in 2008. The bonus depreciation is equal to 50% of the basis of the qualified property. Depreciation is computed under the general tax rules on the remaining 50% of the qualified property's basis. The 2008 bonus deduction resembles the bonus depreciation which applied generally to property obtained and put in service after September 10, 2001, and before January 1, 2005.

MORE INFORMATION

 

Note Make a backup of the company database. You can restore this backup to a test database if you want to test these steps in a test environment first.

For more information about how to set up a test company, click the following article number to view the article in the Microsoft Knowledge Base:

871973 How to set up a test company that has a copy of live company data by using SQL Server 7.0, SQL Server 2000, or SQL Server 2005

To handle the Economic Stimulus Act of 2008, use the Special Depreciation Allowance field in the Asset Book window. To do this, follow one of these methods:

 

Method 1: Change one asset

1.

On the Cards menu, point to Fixed Assets , and then click Book .

2.

Click an asset in the Asset ID list, and then click a book in the Book ID list.

3.

Click Yes in the Special Depr Allowance list.

4.

In the Special Depr Allowance field, type 50% .

5.

Click Save . If you are prompted to continue, click Yes .

6.

When you are prompted to select a Reset option, click Year .

Method 2: Change a group of Assets

To change a group of assets, use the Mass Change feature in Fixed Assets. To do this, follow these steps:

Create an Asset Group ID

1.

On the Transactions menu, point to Fixed Assets , and then click Select Assets .

2.

Click New Group , type a name in the Group Name field, and then click OK .

3.

In the Current Group pane, click the group you created in step 2.

4.

Click to select the Asset ID check box for each asset you want to include in the group. Additionally, you can create a asset restriction to limit the number of assets displayed. To create an asset restriction, type the beginning asset ID in the From Asset ID field, and type the ending asset ID In the To Asset ID field.

5.

Click OK .

Fixed Assets Mass Change

1.

On the Transactions menu, point to Fixed Assets , and then click Mass Change .

2.

In the Asset Group ID list, click an asset group.

3.

Click Book .

4.

In the Book ID list, click a book.

5.

Click to select the Special Depr. Allowance check box, and then click Yes in the Special Depr. Allowance list.

6.

Type 50% in the Special Depr. Allowance field.

7.

Click Reset Year .

8.

Click Apply Changes . When you are promted to apply the changes, click OK .

Note If the Tax Book has been closed for 2008, select Reset Life instead of Reset Year in step 7. If you select Reset Life , the system recalculates depreciation from 2008 through the current depreciation run.

 

Additional information

When you run the Reset process, the system recalculates existing depreciation based on the changes that you have made. These adjustments are recorded in the Financial Detail Master (FA00902) table. This table is located in your company database. You can also view these adjustments by using the Financial Detail Inquiry window.

To run the Reset Process, follow these steps:

1.

On the Inquiry menu, point to Fixed Assets .

2.

Click Financial Detail

If GL Posting is run, the system looks in the Financial Detail Inquiry window (FA00902) for records that have a blank batch ID. These records are then correlated with General Ledger by using the FATRX batch. To run GL Posting, follow these steps:

1.

On the Microsoft Dynamics GP menu, point to Tools .

2.

Point to Routine .

3.

Point to Fixed Assets .

4.

Point to GL Posting .

Because running the Reset process creates new records for adjustments in FA00902, you have the option to create adjusting entries to General Ledger to correct the account balances. You can do this only if this process has been run prior to the Reset process, and also if you do not want to post the FATRX batch. If you do not want to make adjusting entries to General Ledger, you have the option to post the FATRX batch to update the accounts.

REFERENCES

Contact your tax specialist for more information about the Economic Stimulus Act of 2008.

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