Form 3115 Application for Change in Accounting Method

3115

Form
(Rev. December 2003)

Application for Change in Accounting Method

OMB No. 1545-0152

Department of the Treasury
Internal Revenue Service

Name of filer (name of parent corporation if a consolidated group) (see instructions)

Identification number (see instructions)

Principal business activity code number (see instructions)

Number, street, and room or suite no. If a P.O. box, see the instructions.

Tax year of change begins (MM/DD/YYYY)
Tax year of change ends (MM/DD/YYYY)

City or town, state, and ZIP code

Name of contact person (see instructions)

Name of applicant(s) (if different than filer) and identification number(s) (see instructions)

Contact person’s telephone number

(
)
䊳
If the applicant is a member of a consolidated group, check this box
䊳
If Form 2848, Power of Attorney and Declaration of Representative, is attached, check this box
Check the appropriate box to indicate the type
Check the box to indicate the applicant.
of accounting method change being requested.
Cooperative (Sec. 1381)
Individual
(see instructions)
Partnership
Corporation
Controlled foreign corporation
S corporation
Depreciation or Amortization
(Sec. 957)
Insurance co. (Sec. 816(a))
Financial Products and/or Financial Activities of
Insurance co. (Sec. 831)
10/50 corporation (Sec. 904(d)(2)(E))
Financial Institutions
Qualified personal service
Other (specify) 䊳
Other (specify) 䊳
corporation (Sec. 448(d)(2))
Exempt organization. Enter Code section 䊳
Caution: The applicant must provide the requested information to be eligible for approval of the requested accounting method change. The
applicant may be required to provide information specific to the accounting method change such as an attached statement. The applicant
must provide all information relevant to the requested accounting method change, even if not specifically requested by the Form 3115.

Part I
1

Information For Automatic Change Request

Yes No

Enter the requested designated accounting method change number from the List of Automatic Accounting
Method Changes (see instructions). Enter only one method change number, except as provided for in the
instructions. If the requested change is not included in that list, check “Other,” and provide a description.
䊳

(a) Change No.
(b) Other
Description 䊳
2 Is the accounting method change being requested one for which the scope limitations of section 4.02 of Rev.
Proc. 2002-9 (or its successor) do not apply?
If “Yes,” go to Part II.
3 Is the tax year of change the final tax year of a trade or business for which the taxpayer would be required to
take the entire amount of the section 481(a) adjustment into account in computing taxable income?
If “Yes,” the applicant is not eligible to make the change under automatic change request procedures.
Note: Complete Part II below and then Part IV, and also Schedules A through E of this form (if applicable).

Part II

Information For All Requests

Yes No

4a Does the applicant (or any present or former consolidated group in which the applicant was a member during
the applicable tax year(s)) have any Federal income tax return(s) under examination (see instructions)?
If you answered “No,” go to line 5.
b Is the method of accounting the applicant is requesting to change an issue (with respect to either the applicant
or any present or former consolidated group in which the applicant was a member during the applicable tax
year(s)) either (i) under consideration or (ii) placed in suspense (see instructions)?

Signature (see instructions)
Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my
knowledge and belief, the application contains all the relevant facts relating to the application, and it is true, correct, and complete. Declaration of preparer
(other than applicant) is based on all information of which preparer has any knowledge.

Filer

Preparer (other than filer/applicant)

Signature and date

Signature of individual preparing the application and date

Name and title (print or type)

Name of individual preparing the application (print or type)

Name of firm preparing the application

For Privacy Act and Paperwork Reduction Act Notice, see the instructions.

Cat. No. 19280E

Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

Part II

Page

Information For All Requests (continued)

2

Yes No

4c Is the method of accounting the applicant is requesting to change an issue pending (with respect to either the
applicant or any present or former consolidated group in which the applicant was a member during the applicable
tax year(s)) for any tax year under examination (see instructions)?
d Is the request to change the method of accounting being filed under the procedures requiring that the operating
division director consent to the filing of the request (see instructions)?
If “Yes,” attach the consent statement from the director.
e Is the request to change the method of accounting being filed under the 90-day or 120-day window period?
If “Yes,” check the box for the applicable window period and attach the required statement (see instructions).
90 day
120 day
f If you answered “Yes” to line 4a, enter the name and telephone number of the examining agent and the tax
year(s) under examination.
Telephone number 䊳
Tax year(s) 䊳
Name 䊳
g Has a copy of this Form 3115 been provided to the examining agent identified on line 4f?
5a Does the applicant (or any present or former consolidated group in which the applicant was a member during
the applicable tax year(s)) have any Federal income tax return(s) before Appeals and/or a Federal court?
Appeals officer and/or
counsel for the government,
If “Yes,” enter the name of the (check the box)
and the tax year(s) before Appeals and/or a Federal court.
Name 䊳
Telephone number 䊳
Tax year(s) 䊳
b Has a copy of this Form 3115 been provided to the Appeals officer and/or counsel for the government identified
on line 5a?
c Is the method of accounting the applicant is requesting to change an issue under consideration by Appeals
and/or a Federal court (for either the applicant or any present or former consolidated group in which the applicant
was a member for the tax year(s) the applicant was a member)?
If “Yes,” attach an explanation.
6 If the applicant answered “Yes” to line 4a and/or 5a with respect to any present or former consolidated group,
provide each parent corporation’s (a) name, (b) identification number, (c) address, and (d) tax year(s) during which
the applicant was a member that is under examination, before an Appeals office, and/or before a Federal court.
7

8

If the applicant is an entity (including a limited liability company) treated as a partnership or S corporation for
Federal income tax purposes, is it requesting a change from a method of accounting that is an issue under
consideration in an examination, before Appeals, or before a Federal court, with respect to a Federal income
tax return of a partner, member, or shareholder of that entity?
If “Yes,” the applicant is not eligible to make the change.
Is the applicant making a change to which audit protection does not apply (see instructions)?

9a Has the applicant, its predecessor, or a related party requested or made (under either an automatic change
procedure or a procedure requiring advance consent) a change in accounting method within the past 5 years
(including the year of the requested change)?
b If “Yes,” attach a description of each change and the year of change for each separate trade or business and
whether consent was obtained.
c If any application was withdrawn, not perfected, or denied, or if a Consent Agreement was sent to the taxpayer
but was not signed and returned to the IRS, or if the change was not made or not made in the requested year
of change, include an explanation.
10a Does the applicant, its predecessor, or a related party currently have pending any request (including any
concurrently filed request) for a private letter ruling, change in accounting method, or technical advice?
b If “Yes,” for each request attach a statement providing the name(s) of the taxpayer, identification number(s), the
type of request (private letter ruling, change in accounting method, or technical advice), and the specific issue(s)
in the request(s).
11

12
a
b
c
d

Is the applicant requesting to change its overall method of accounting?
If “Yes,” check the appropriate boxes below to indicate the applicant’s present and proposed methods of
accounting. Also, complete Schedule A on page 4 of the form.
Present method:
Cash
Accrual
Hybrid (attach description)
Proposed method:
Cash
Accrual
Hybrid (attach description)
If the applicant is not changing its overall method of accounting, attach a detailed and complete description
for each of the following:
The item(s) being changed.
The applicant’s present method for the item(s) being changed.
The applicant’s proposed method for the item(s) being changed.
The applicant’s present overall method of accounting (cash, accrual, or hybrid).
Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

Part II

Page

Information For All Requests (continued)

3

Yes No

13

Attach a detailed and complete description of the applicant’s trade(s) or business(es), and the principal
business activity code for each. If the applicant has more than one trade or business as defined in
Regulations section 1.446-1(d), describe: whether each trade or business is accounted for separately; the
goods and services provided by each trade or business and any other types of activities engaged in that
generate gross income; the overall method of accounting for each trade or business; and which trade or
business is requesting to change its accounting method as part of this application or a separate application.

14

Will the proposed method of accounting be used for the applicant’s books and records and financial statements?
For insurance companies, see the instructions
If “No,” attach an explanation.

15a Has the applicant engaged, or will it engage, in a transaction to which section 381(a) applies (e.g., a reorganization,
merger, or liquidation) during the proposed tax year of change determined without regard to any potential closing
of the year under section 381(b)(1)?
b If “Yes,” for the items of income and expense that are the subject of this application, attach a statement identifying
the methods of accounting used by the parties to the section 381(a) transaction immediately before the date of
distribution or transfer and the method(s) that would be required by section 381(c)(4) or (c)(5) absent consent to
the change(s) requested in this application.
16
17

Does the applicant request a conference of right with the IRS National Office if the IRS proposes an adverse
response?
If the applicant is changing to or from the cash method or changing its method of accounting under sections
263A, 448, 460, or 471, enter the gross receipts of the 3 tax years preceding the year of change.
1st preceding
year ended: mo.

yr.

$

Part III
18

19

2nd preceding
year ended: mo.

$

yr.

3rd preceding
year ended: mo.

yr.

$

Information For Advance Consent Request

Yes No

Is the applicant’s requested change described in any revenue procedure, revenue ruling, notice, regulation, or
other published guidance as an automatic change request?
If “Yes,” attach an explanation describing why the applicant is submitting its request under advance consent
request procedures.
Attach a full explanation of the legal basis supporting the proposed method for the item being changed. Include
a detailed and complete description of the facts that explains how the law specifically applies to the applicant’s
situation and that demonstrates that the applicant is authorized to use the proposed method. Include all authority
(statutes, regulations, published rulings, court cases, etc.) supporting the proposed method. The applicant should
include a discussion of any authorities that may be contrary to its use of the proposed method.

20
21
22

Attach a copy of all documents related to the proposed change (see instructions).
Attach a statement of the applicant’s reasons for the proposed change.
If the applicant is a member of a consolidated group for the year of change, do all other members of the
consolidated group use the proposed method of accounting for the item being changed?
If “No,” attach an explanation.
23a Enter the amount of user fee attached to this application (see instructions). 䊳 $
b If the applicant qualifies for a reduced user fee, attach the necessary information or certification required by Rev.
Proc. 2003-1 (or its successor) (see instructions).

Part IV
24
25

26
27

Section 481(a) Adjustment

Yes No

Do the procedures for the accounting method change being requested require the use of the cut-off method?
If “Yes,” do not complete lines 25, 26, and 27 below.
Enter the section 481(a) adjustment. Indicate whether the adjustment is an increase (+) or a decrease (-) in
income. 䊳 $
Attach a summary of the computation and an explanation of the
methodology used to determine the section 481(a) adjustment. If it is based on more than one component, show
the computation for each component. If more than one applicant is applying for the method change on the same
application, attach a list of the name, identification number, principal business activity code (see instructions),
and the amount of the section 481(a) adjustment attributable to each applicant.
If the section 481(a) adjustment is an increase to income of less than $25,000, does the applicant elect to take
the entire amount of the adjustment into account in the year of change?
Is any part of the section 481(a) adjustment attributable to transactions between members of an affiliated
group, a consolidated group, a controlled group, or other related parties?
If “Yes,” attach an explanation.
Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

Page

4

Schedule A—Change in Overall Method of Accounting (If Schedule A applies, Part I below must be completed.)
Part I
Change in Overall Method (see instructions)
1

Enter the following amounts as of the close of the tax year preceding the year of change. If none, state “None.” Also,
attach a statement providing a breakdown of the amounts entered on lines 1a through 1g.
Amount

a Income accrued but not received
b Income received or reported before it was earned. Attach a description of the income and the legal
basis for the proposed method
c Expenses accrued but not paid
d Prepaid expenses previously deducted
e Supplies on hand previously deducted and/or not previously reported
f Inventory on hand previously deducted and/or not previously reported. Complete Schedule D, Part II
g Other amounts (specify) 䊳
h Net section 481(a) adjustment (Combine lines 1a–1g.)

$

$

Yes
No
Is the applicant also requesting the recurring item exception under section 461(h)(3)?
Attach copies of the profit and loss statement (Schedule F (Form 1040) for farmers) and the balance sheet, if applicable, as
of the close of the tax year preceding the year of change. On a separate sheet, state the accounting method used when
preparing the balance sheet. If books of account are not kept, attach a copy of the business schedules submitted with the
Federal income tax return or other return (e.g., tax-exempt organization returns) for that period. If the amounts in Part I,
lines 1a through 1g, do not agree with those shown on both the profit and loss statement and the balance sheet, explain
the differences on a separate sheet.

2
3

Part II

Change to the Cash Method For Advance Consent Request (see instructions)

Applicants requesting a change to the cash method must attach the following information:
1 A description of inventory items (items whose production, purchase, or sale is an income-producing factor) and materials
and supplies used in carrying out the business.
2 An explanation as to whether the applicant is required to use the accrual method under any section of the Code or regulations.

Schedule B—Change in Reporting Advance Payments (see instructions)
1

If the applicant is requesting to defer advance payment for services under Rev. Proc. 71-21, 1971-2 C.B. 549, attach the
following information:
a Sample copies of all service agreements used by the applicant that are subject to the requested change in accounting
method. Indicate the particular parts of the service agreement that require the taxpayer to perform services.
b If any parts or materials are provided, explain whether the obligation to provide parts or materials is incidental (of minor or
secondary importance) to an agreement providing for the performance of personal services.
c If the change relates to contingent service contracts, explain how the contracts relate to merchandise that is sold, leased,
installed, or constructed by the applicant and whether the applicant offers to sell, lease, install, or construct without the
service agreement.
d A description of the method the applicant will use to determine the amount of income earned each year on service contracts
and why that method clearly reflects income earned and related expenses in each year.
e An explanation of how the method the applicant will use to determine the amount of gross receipts each year will be no less
than the amount included in gross receipts for purposes of its books and records. See section 3.11 of Rev. Proc. 71-21.

2

If the applicant is requesting a deferral of advance payments for goods under Regulations section 1.451-5, attach the
following information:

a Sample copies of all agreements for goods or items requiring advance payments used by the applicant that are subject to
the requested change in accounting method. Indicate the particular parts of the agreement that require the applicant to
provide goods or items.
b A statement providing that the entire advance payment is for goods or items. If not entirely for goods or items, a statement
that an amount equal to 95% of the total contract price is properly allocable to the obligation to provide activities described
in Regulations section 1.451-5(a)(1)(i) or (ii) (including services as an integral part of those activities).
c An explanation of how the method the applicant will use to determine the amount of gross receipts each year will be no less
than the amount included in gross receipts for purposes of its books and records. See Regulations section 1.451-5(b)(1).
Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

Page

5

Schedule C—Changes Within the LIFO Inventory Method (see instructions)
Part I
General LIFO Information
Complete this section if the requested change involves changes within the LIFO inventory method. Also, attach a copy of all
Forms 970, Application To Use LIFO Inventory Method, filed to adopt or expand the use of the LIFO method.
1

Attach a description of the applicant’s present and proposed LIFO methods and submethods for each of the following
items:

a Valuing inventory (e.g., unit method or dollar-value method).
b Pooling (e.g., by line or type or class of goods, natural business unit, multiple pools, raw material content, simplified
dollar-value method, inventory price index computation (IPIC) pools, etc.).
c Pricing dollar-value pools (e.g., double-extension, index, link-chain, link-chain index, IPIC method, etc.).
d Determining the current year cost of goods in the ending inventory (e.g., most recent purchases, earliest acquisitions
during the year, average cost of purchases during the year, etc.).
2

If any present method or submethod used by the applicant is not the same as indicated on Form(s) 970 filed to adopt or
expand the use of the method, attach an explanation.

3

If the proposed change is not requested for all the LIFO inventory, specify the inventory to which the change is and is not
applicable.

4

If the proposed change is not requested for all of the LIFO pools, specify the LIFO pool(s) to which the change is
applicable.

5

Attach a statement addressing whether the applicant values any of its LIFO inventory on a method other than cost. For
example, if the applicant values some of its LIFO inventory at retail and the remainder at cost, the applicant should identify
which inventory items are valued under each method.

6

If changing to the IPIC method, attach a completed Form 970 and a statement indicating the indexes, tables, and
categories the applicant proposes to use.

Part II

Change in Pooling Inventories

1

If the applicant is proposing to change its pooling method or the number of pools, attach a description of the contents of,
and state the base year for, each dollar-value pool the applicant presently uses and proposes to use.

2

If the applicant is proposing to use natural business unit (NBU) pools or requesting to change the number of NBU pools,
attach the following information (to the extent not already provided) in sufficient detail to show that each proposed NBU was
determined under Regulations section 1.472-8(b)(1) and (2):

a A description of the types of products produced by the applicant. If possible, attach a brochure.
b A description of the types of processes and raw materials used to produce the products in each proposed pool.
c If all of the products to be included in the proposed NBU pool(s) are not produced at one facility, the applicant should explain
the reasons for the separate facilities, indicate the location of each facility, and provide a description of the products each
facility produces.
d A description of the natural business divisions adopted by the taxpayer. State whether separate cost centers are
maintained and if separate profit and loss statements are prepared.
e A statement addressing whether the applicant has inventories of items purchased and held for resale that are not further
processed by the applicant, including whether such items, if any, will be included in any proposed NBU pool.
f A statement addressing whether all items including raw materials, goods-in-process, and finished goods entering into the
entire inventory investment for each proposed NBU pool are presently valued under the LIFO method. Describe any items
that are not presently valued under the LIFO method that are to be included in each proposed pool.
g A statement addressing whether, within the proposed NBU pool(s), there are items both sold to unrelated parties and
transferred to a different unit of the applicant to be used as a component part of another product prior to final processing.
3

If the applicant is engaged in manufacturing and is proposing to use the multiple pooling method or raw material content
pools, attach information to show that each proposed pool will consist of a group of items that are substantially similar.
See Regulations section 1.472-8(b)(3).

4

If the applicant is engaged in the wholesaling or retailing of goods and is requesting to change the number of pools used,
attach information to show that each of the proposed pools is based on customary business classifications of the
applicant’s trade or business. See Regulations section 1.472-8(c).
Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

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6

Schedule D—Change in the Treatment of Long-Term Contracts Under Section 460, Inventories, or Other
Section 263A Assets (see instructions)
Part I
Change in Reporting Income From Long-Term Contracts (Also complete Part III on pages 7 and 8.)
To the extent not already provided, attach a description of the applicant’s present and proposed methods for reporting income
and expenses from long-term contracts. If the applicant is a construction contractor, include a detailed description of its
construction activities.
2a Are the applicant’s contracts long-term contracts as defined in section 460(f)(1) (see instructions)?
Yes
No
b If “Yes,” do all the contracts qualify for the exception under section 460(e) (see instructions)?
Yes
No
If line 2b is “No,” attach an explanation.
c If line 2b is “Yes,” is the applicant requesting to use the percentage-of-completion method using cost-to-cost
Yes
No
under Regulations section 1.460-4(b)?
1

d If line 2c is “No,” is the applicant requesting to use the exempt-contract percentage-of-completion method
under Regulations section 1.460-4(c)(2)?
If line 2d is “Yes,” explain what cost comparison the applicant will use to determine a contract’s completion
factor.
If line 2d is “No,” explain what method the applicant is using and the authority for its use.
3a Does the applicant have long-term manufacturing contracts as defined in section 460(f)(2)?
b If “Yes,” explain the applicant’s present and proposed method(s) of accounting for long-term manufacturing
contracts.
c Describe the applicant’s manufacturing activities, including any required installation of manufactured goods.
4 To determine a contract’s completion factor using the percentage-of-completion method:
a Will the applicant use the cost-to-cost method in Regulations section 1.460-4(b)?
b If line 4a is “No,” is the applicant electing the simplified cost-to-cost method (see section 460(b)(3) and
Regulations section 1.460-5(c))?
5 Attach a statement indicating whether any of the applicant’s contracts are either cost-plus long-term
contracts or Federal long-term contracts.

Part II
1
2
3

Yes

No

Yes

No

Yes

No

Yes

No

Change in Valuing Inventories Including Cost Allocation Changes (Also complete Part III on pages 7 and 8.)

Attach a description of the inventory goods being changed.
Attach a description of the inventory goods (if any) NOT being changed.
If the applicant is subject to section 263A, is its present inventory valuation method in compliance with
section 263A (see instructions)?
Inventory Being Changed

Yes

No

Inventory Not
Being Changed

4a Check the appropriate boxes below.
Present method Proposed method Present method
Identification methods:
Specific identification
FIFO
LIFO
Other (attach explanation)
Valuation methods:
Cost
Cost or market, whichever is lower
Retail cost
Retail, lower of cost or market
Other (attach explanation)
b Enter the value at the end of the tax year preceding the year of change
5 If the applicant is changing from the LIFO inventory method to a non-LIFO method, attach the following information (see
instructions).
a Copies of Form(s) 970 filed to adopt or expand the use of the method.
b Only for applicants requesting advance consent. A statement describing whether the applicant is changing to the method
required by Regulations section 1.472-6(a) or (b), or whether the applicant is proposing a different method.
c Only for applicants requesting an automatic change. Attach the statement required by section 10.01(4) of the Appendix
of Rev. Proc. 2002-9 (or its successor).
Form

3115

(Rev. 12-2003)

7
Method of Cost Allocation (Complete this part if the requested change involves either property subject
to section 263A or long-term contracts as described in section 460 (see instructions).)

Form 3115 (Rev. 12-2003)

Part III

Page

Section A—Allocation and Capitalization Methods
Attach a description (including sample computations) of the present and proposed method(s) the applicant uses to capitalize direct
and indirect costs properly allocable to real or tangible personal property produced and property acquired for resale, or to allocate
and, where appropriate, capitalize direct and indirect costs properly allocable to long-term contracts. Include a description of the
method(s) used for allocating indirect costs to intermediate cost objectives such as departments or activities prior to the allocation
of such costs to long-term contracts, real or tangible personal property produced, and property acquired for resale. The description
must include the following:
1
2

3

The method of allocating direct and indirect costs (i.e., specific identification, burden rate, standard cost, or other
reasonable allocation method).
The method of allocating mixed service costs (i.e., direct reallocation, step-allocation, simplified service cost using the
labor-based allocation ratio, simplified service cost using the production cost allocation ratio, or other reasonable allocation
method).
The method of capitalizing additional section 263A costs (i.e., simplified production with or without the historic absorption
ratio election, simplified resale with or without the historic absorption ratio election including permissible variations, the
U.S. ratio, or other reasonable allocation method).

Section B—Direct and Indirect Costs Required To Be Allocated (Check the appropriate boxes in Section B showing the costs
that are or will be fully included, to the extent required, in the cost of real or tangible personal property produced or property
acquired for resale under section 263A or allocated to long-term contracts under section 460. Mark “N/A” in a box if those costs
are not incurred by the applicant. If a box is not checked, it is assumed that those costs are not fully included to the extent
required. Attach an explanation for boxes that are not checked.)
Present method Proposed method

1
2
3
4
5
6
7
8
9
10

Direct material
Direct labor
Indirect labor
Officers’ compensation (not including selling activities)
Pension and other related costs
Employee benefits
Indirect materials and supplies
Purchasing costs
Handling, processing, assembly, and repackaging costs
Offsite storage and warehousing costs

11

Depreciation, amortization, and cost recovery allowance for equipment and facilities placed in
service and not temporarily idle
Depletion
Rent
Taxes other than state, local, and foreign income taxes
Insurance
Utilities
Maintenance and repairs that relate to a production, resale, or long-term contract activity
Engineering and design costs (not including section 174 research and experimental
expenses)
Rework labor, scrap, and spoilage
Tools and equipment
Quality control and inspection
Bidding expenses incurred in the solicitation of contracts awarded to the applicant
Licensing and franchise costs
Capitalizable service costs (including mixed service costs)
Administrative costs (not including any costs of selling or any return on capital)
Research and experimental expenses attributable to long-term contracts
Interest
Other costs (Attach a list of these costs.)

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Form

3115

(Rev. 12-2003)

Form 3115 (Rev. 12-2003)

Part III

Page

8

Method of Cost Allocation (see instructions) (continued)

Section C—Other Costs Not Required To Be Allocated (Complete Section C only if the applicant is requesting to change its
method for these costs.)
Present method Proposed method

1
2
3
4
5
6
7
8
9
10
11

Marketing, selling, advertising, and distribution expenses
Research and experimental expenses not included on line 26 above
Bidding expenses not included on line 22 above
General and administrative costs not included in Section B above
Income taxes
Cost of strikes
Warranty and product liability costs
Section 179 costs
On-site storage
Depreciation, amortization, and cost recovery allowance not included on line 11 above
Other costs (Attach a list of these costs.)

Schedule E—Change in Depreciation or Amortization (see instructions)
Applicants requesting approval to change their method of accounting for depreciation or amortization complete this section.
Applicants must provide this information for each item or class of property for which a change is requested.
Note: See the List of Automatic Accounting Method Changes in the instructions for information regarding automatic changes
under sections 56, 167, 168, 197, 1400I, 1400L, or former section 168. Do not file Form 3115 with respect to certain late elections
and election revocations (see instructions).
Yes
No
Is depreciation for the property determined under Regulations section 1.167(a)-11 (CLADR)?
If “Yes,” the only changes permitted are under Regulations section 1.167(a)-11(c)(1)(iii).
2 Is any of the depreciation or amortization required to be capitalized under any Code section (e.g., section
263A)?
Yes
No
If “Yes,” enter the applicable section 䊳
3 Has a depreciation or amortization election been made for the property (e.g., the election under section
168(f)(1))?
Yes
No
If “Yes,” state the election made 䊳
4a To the extent not already provided, attach a statement describing the property being changed. Include in the description the
type of property, the year the property was placed in service, and the property’s use in the applicant’s trade or business or
income-producing activity.
1

Yes
No
b If the property is residential rental property, did the applicant live in the property before renting it?
c Is the property public utility property?
Yes
No
5 To the extent not already provided in the applicant’s description of its present method, explain how the property is treated
under the applicant’s present method (e.g., depreciable property, inventory property, supplies under Regulations section
1.162-3, nondepreciable section 263(a) property, property deductible as a current expense, etc.).
6 If the property is not currently treated as depreciable or amortizable property, provide the facts supporting the proposed
change to depreciate or amortize the property.
7 If the property is currently treated and/or will be treated as depreciable or amortizable property, provide the following
information under both the present (if applicable) and proposed methods:
a The Code section under which the property is or will be depreciated or amortized (e.g., section 168(g)).
b The applicable asset class from Rev. Proc. 87-56, 1987-2 C.B. 674, for each asset depreciated under section 168 (MACRS)
or under section 1400L; the applicable asset class from Rev. Proc. 83-35, 1983-1 C.B. 745, for each asset depreciated under
former section 168 (ACRS); an explanation why no asset class is identified for each asset for which an asset class has not
been identified by the applicant.
c The facts to support the asset class for the proposed method.
d The depreciation or amortization method of the property, including the applicable Code section (e.g., 200% declining balance
method under section 168(b)(1)).
e The useful life, recovery period, or amortization period of the property.
f The applicable convention of the property.
Form

3115

(Rev. 12-2003)