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Fleet Advantage President Holland Discusses Asset Acquisition Strategies

November 06, 2018, 06:50 AM
Filed Under: Industry News

Fleet Advantage announced President and Chief Financial Officer Brian Holland is presenting at this year’s AFP 2018 conference at McCormick Place in Chicago. Holland’s session: How Corporate Tax Changes & FASB Accounting Standards Have Impacted Equipment Acquisition, is scheduled for Nov. 6 at 2:00 pm CDT.

The U.S. economy expanded 3.5 percent during the third quarter, and it is on pace for the strongest annual performance since 2005. The U.S. economy expanded by 4.2 percent during the second quarter. While this pace may be difficult to sustain, investment in equipment is among the reasons why the economy has been strong the last few years.

Aiding business investment in equipment has been the recent U.S. business tax reforms—in particular, a 21 percent corporate tax rate and immediate expensing for equipment. Recent changes made to the FASB and IASB accounting standards may impact a company's bottom line and decisions about equipment acquisition. This session will examine how the Tax Cuts and Jobs Act and new lease accounting standards may affect lease versus purchase decisions, and how certain equipment lease structures may impact overall financial performance. This session will also focus on tax reform implementation, including the status and outlook for regulatory guidance, as well as legislation making technical corrections and more substantive changes to the Tax Cuts and Jobs Act.

“The new tax plan contains several provisions that will impact equipment procurement – lower tax rates for businesses, non-deductibility of interest expense for C corporations, limiting like-kind exchanges to real property and expensing of depreciable assets instead of writing them off over years,” Holland said. “The key is to know how these changes may impact a company’s balance sheet, financial plan and tax strategy, and to adjust accordingly to help improve the company’s financial performance.”

The session will also address and dispel certain myths in equipment acquisition, such as having a lease on the balance sheet is counterproductive to meeting financial goals. Even with the changes to the tax rate and FASB accounting standards, purchase of equipment remains costlier compared with shorter-term leasing of equipment. What’s more, leasing remains the preferred method for companies regardless if they have a stronger or weaker balance sheet.

The Association for Financial Professionals (AFP) each year, serves as host ti the largest networking conference worldwide for over 6,500 corporate finance professionals.

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