It’s that time of year to clear away old equipment from your financial statements so you are not haunted by unused and out-of-date equipment that can suck the life out of your bottom line.
Unused equipment is commonly referred to as a “ghost asset.” Ghost assets are fixed assets that remain on the financial statement even though they are no longer in use or even in the business owner’s possession, but that are still included on property tax returns.
Typical ghost assets include old registers, freezers, grills, signs – any equipment that has been replaced and is no longer used in the business. It’s easy to forget that these assets are still lingering on the inventory statements. Consider the situation where an owner/operator has replaced a shake machine earlier in the year but has not updated the inventory listing. The old machine and the new one are both sitting on the financial statement as taxable assets, exposing the owner/operator to higher taxes.
To make sure our business clients do not overpay income and property taxes, we send notifications each fall with a list of their known assets so they can mark which ones are still in use and which ones have been retired in the past year. Once you receive this notification with the asset listing, please return it to our office as soon as possible. You can either upload the information to ShareFile, email to Robin Tignor at email@example.com, fax to 770-483-5412 or mail to our offices at 1429 Iris Drive S.E., Conyers, GA 30013. It is important that the assets lists are up-to-date for year-end financial reporting and preparation of property tax returns.
If you have any questions, please contact our office.
Robin Tignor, CPA, is an Accounting Manager at Antares Group, Inc. She can be reached at firstname.lastname@example.org.