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Annually review your fixed asset listing (trucks, cars, equipment, properties, office equipment, etc.) and make decisions as to write-offs, retirements, upgrades and possibilities for productivity gains with replacement technologies. This review may lay the basis for part of the next year’s capital acquisition plan. Yearend is most likely the best time to do this analysis because it is related to property tax renditions (declaration of equipment and their values).
Clean off those fixed assets before yearend to cut property taxes. You may want to do all of this during the fourth calendar quarter ending in 12/31. Take the time to ask questions about the fixed assets at least prior to property tax time (you pay tax normally on items that are on site at midnight on the last day of the year, 12/31 (at least in most counties and jurisdictions).
Pass out copies and ask several people. Pass several copies of a listing of all these fixed items remaining in your records to your employees that are aware of what you own (i.e. Tooling, machinery, shop racks, office furniture, vehicles, land, fencing, parking lots, buildings, add-ons, computers, printers, laptops, etc.). You may have the items on site, but are they working? Are the items broken? Are they being held only for parts?
Get input from lots of people. Pass this list around to production, maintenance and the engineering department. Do not rely on one guy; you need input from multiple sources. Tell them if the parts are now gone, clearly identify all that need to be written off.
Consider selling off used equipment. Call a trusted used equipment dealer and get some market values for unused machines that might generate enough to put a deposit on some new replacements. No matter what you do for retirements, at a minimum, get those unused items completely written off the books entirely before you close the balance sheet for this period. In order to avoid property tax, the equipment must be completely off your records in most taxing authorities so find out before closing your books for the year in order to minimize your next year’s taxes.
