How to Configure Asset Management for the Job Creation and Worker Assistance Act of 2002

  • by David E Nelson, Tax Product Manager, SAP America Inc.
  • September 15, 2002
Step-by-step instructions for allowing companies that use R/3 to accommodate this new law providing post 9-11 tax relief.

The tragic events of September 11, 2001, and its debilitating effects on the American economy led the United States Congress to pass an economic stimulus bill known as the Job Creation and Worker Assistance Act of 2002. A critical tax savings element of the bill was a greatly accelerated expensing of assets purchased after September 11. Specifically, a corporation purchasing certain types of assets after September 10, 2001, and before September 11, 2004, will be able to expense 30 percent of those assets’ value immediately. Examples of assets not eligible would include most buildings and property used outside the U.S.

The effect is two-fold: reduced taxes for the purchaser and increased orders for the seller. These provisions caused many corporate taxpayers to consider re-filing tax returns for 2001 to take advantage of the tax savings. It also forced providers of asset depreciation software to develop a solution for correctly calculating depreciation under the new law. SAP Development delivered a means to accommodate the Act to its U.S. customers within weeks of its passage.

Users of the R/3 Asset Accounting functionality in FI can implement OSS note 505069, which provides separate directions for R/3 releases prior to 4.0, releases after 4.0 and prior to 4.6, and release 4.6. However, the configuration elements, described below, are essentially the same. I’ve also provided screenprints to illustrate the process.

David E Nelson

David Nelson has more than eight years’ experience with SAP as a Financial and Controlling module consultant, a project implementation manager, and as a tax product manager. He has 15 years’ experience in Federal, state, and local taxation. Prior to joining SAP, he was a controller for a division of a multinational chemical manufacturer, and a state and local tax and payroll manager for a multinational automotive manufacturer. While serving in those capacities, he was also the implementation project manager for a general ledger system and a human resource/payroll system. Currently, he is the U.S. tax product manager for SAP America. David has an MBA from Wake Forest University and is a CPA. He is a member of American Institute of CPAs and the North Carolina Association of CPAs. He has served on the Technology Committee for the North Carolina Association.

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