Employee Automobile Benefit
Before I joined the company the decision was made to provide an employee with an automobile as a form of additional compensation. The employee had threatened to leave so the offer of the automobile was made to appease him. The vehicle is titled to the employee. The financing for the vehicle is under the employee's name. The company pays the loan payment for the employee. The employee pays for tax, license and maintenance. The company is expensing the entire loan payment since the principal and interest are both considered a benefit to the employee. However, I found that the asset was also being depreciated which is an obvious no no. It's a bit of a cluster so I am wondering what course of action would be best for the company regarding how the benefit is structured. -Thanks!