What is SAP BASIS

 SAP BASIS

Basis is a set of middleware programs and tools from SAP, the German company whose comprehensive R/3 product is used to help manage large corporations. SAP provides the underlying base (thus the name) that enables applications (such as FI, CO, and SD, for example) to be interoperable and portable across operating systems and database products.

R/3 Basis includes client/server architecture and configuration, a relational database management system (RDBMS), and a graphical user interface (GUI). In addition to the interface between system elements, Basis components include a development environment for R/3 applications, and a data dictionary, as well as user and system administration and monitoring tools.

SAP Basis is the technology platform that supports all of SAP applications. They have both low level services like database communication and high level tools for end user and administrators. The basis in a business asset is the cost of that asset. The cost includes the purchase price, shipping, installation, and other services associated with the asset.                                          

Knowing the basis of an asset, and including all aspects of the purchase of that asset is important for two purposes:Capital gains and Depreciation. Capital gains taxes are based on the gain in price of the asset from the original cost of purchase (the basis), so a higher basis can mean lower capital gains tax. Depreciation is the cost of an asset spread out over its useful life. These costs are considered business expenses, so the higher the cost (basis), the more you deduct as an expense.It's important to capture all of the costs included in the purchase of an asset, to turn over to your tax prepare to determine the basis and calculate capital gains taxes when the asset is sold and depreciation during the time you own the asset.