(1) Reduce the number of depreciation classes to four: three for short- to mid-term property and one for longer-lived assets. There would be only one permitted depreciation method.
(2) Slow depreciation from double-declining balance to declining balance. Real estate would remain straight-line.
(3) Allow expanded general asset accounting. This means that asset categories are pooled, and depreciation is calculated by…
(4) Repeal like-kind exchanges.
(5) Repeal depreciation recapture for pooled assets.
(6) The maximum cost of mixed- use vehicles is capped at $45,000.
(7) Repeal expensing for research and development expenses. The default treatment will be to capitalize and depreciate over 5 years.
(8) Disallow the deduction for advertising. In its place, you would deduct one-half immediately and then amortize the balance over 5 years.
(9) Treat “qualified extraction expenditures” the same way as research and development.
(11) Make permanent Section 179 expensing.
(12) The Section 197 amortization period is increased from 15 to 20 years.
(13) All business with less than $10 million in annual gross receipts can use the cash basis of accounting and not account for inventory.
(14) If you are not described in (13) then you are on the accrual basis of accounting.
(15) Businesses described in (13) do not have to suffer through the Section 263A uniform capitalization calculations.
(16) LIFO is repealed.
COMMENT: I do not particularly care for LIFO, but I acknowledge that major industries use it extensively, and it is considered GAAP when auditors render their auditors’ report. The government is not chasing this down because they had brilliant debates while in accounting theory class. They want the jack.
(17) The completed contract method of accounting (think contractors) is repealed, except for small construction contracts.