An organization’s fixed asset registry is a comprehensive list of its fixed assets. This register is primarily created and used to maintain track of the book value of the assets for accounting and tax purposes.
Creating and maintaining a fixed asset register, as well as completing periodic physical checks on fixed assets, has become a critical task, especially for asset-intensive companies. Failure to do so may result in a balance sheet overestimation or underestimate of the company’s assets. External auditors may seek proof that the assets listed on the balance sheet exist, and an independent confirmation can help with that.
Maintaining a thorough and accurate fixed asset registry is the responsibility of the Finance or Accounts manager. The fixed assets register, which will be kept in an excel spreadsheet or a book, should include the following information:
-Identification or serial number
-Description of asset
-Class of asset
-Cost of acquisition
-Net book value
The accountant shall generate a depreciation schedule for each of the goods at the end of each month, using the depreciation rates indicated in sub-section.
The Finance Manager should go over the schedules and sign them as proof that he or she has done so. The accountant must update the fixed assets register based on the depreciation general journal that has been thoroughly evaluated.
Accounting for fixed assets addition
The acquisition of fixed assets must be recorded and paid according to payment rules.
The asset must be categorized, labeled, and registered in the fixed assets inventory register upon delivery.
Accounting for disposal of assets
Disposal of fixed assets must be approved by the organization’s board of directors. No assets should be sold without the board’s prior written approval.
The management should request public bids for the asset purchase based on the board’s written authorization.
The board shall meet and adjudicate the proposals after receiving a minimum of three bids. The finance manager and accountant shall prepare a log to document the disposal and the bidder’s debts when the sale to the winning bidder is completed, based on the board disposal authority and adjudicated bids. If there is a revaluation, an adjustment will be made in the journal.
The accountant should issue a general receipt if the disposal is a cash sale.
An auction may be held at the board’s discretion. The auction’s cash earnings should be handled in the same way.
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