Similar to a cost segregation study, the goal of a fixed asset study is to take assets and reclassify them to a shorter depreciable life. This acceleration of the depreciation expense makes the client eligible for a 481(a) or “catch-up” adjustment. However, as cost segregation studies typically focus on specific real estate assets, fixed asset studies include all of the assets a client owns. Fixed asset studies combine a more detailed invoice review of the client’s documentation with the engineering review included in the cost segregation studies.
A fixed asset study may include one or more cost segregation studies. Since fixed asset studies provide a review of all of the assets an entity owns, it may require that we look at specific properties utilizing our cost segregation expertise. Fixed asset studies often contain multiple, small cost segregation studies on specific assets.
Similarly, all assets placed in service since January 1, 1987, are eligible for review.