The client’s ERP system (SAP) was not offering the synergies required to manage the complexities of the business and calculate tax depreciation effectively. Certain challenges or problem areas were identified:
- Grouping over 8000 individual assets into the ‘block of assets’ as per the Income Tax Act.
- Summarising the accumulated cost and depreciation of individual assets into the block of assets – the financial team had difficulties reconciling the data to the legacy asset register.
- Gaps in the standard functionality delivered in the India country version of SAP – asset put to use data was not automatically updated as part of the capitalisation process
- Misalignment between individual asset values and values at block level, causing incorrect Written Down Value depreciation calculations.
- No tools set up to assign individual assets to the blocks and or migrate the fixed asset register at the individual asset or block level.