Fixed asset tax adjustment

Requirement

If in the last quarter of the year, the company makes over 40% of its asset additions, then the depreciation must be calculated based on the mid-quarter assumption for the assets added in the current year.

M3 solution

The Tax Adjustment Proposal in M3 is used to check if the total additions in the last accounting quarter exceed 40% of the total depreciable assets placed in service during the entire year and the half year convention is being used. If this is the case, then the half year convention is switched to the mid quarter rule when the proposal is updated. The fixed asset records are updated accordingly.

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