A fixed asset register is an item listing of all fixed assets purchased by the business which can combine details such as what the assets are, where it is placed, purchase price and date, effective life of the asset within the business and predict value at the end of its effective life and is used to summaries both accounting and deductible taxation depreciation expense.
Accurate Fixed Asset Register
The value of maintaining an accurate fixed asset register is occasionally neglected by small business, keeping an up to date and accurate fixed asset register doesn’t only assist with security compliance is correctly recorded it can play a very valuable role in assisting businesses with short and long-term planning.
Benefits of Accurate Fixed Register
The benefits of maintaining an accurate and up to date asset register mostly including –
- Calculation of annual reduction
- Forecasting profits and cash flow regarding maintenance of assets, increasing assets and replacement of assets
- In order to obtain finance or at least the most finance possible to grow your business, financiers will generally require an up to date assets register
- Used as a tool to stay on top of and try to prevent theft of assets
- Succession or business exit planning and determining your business true value
Hardly will business holders be able to list every fixed asset they hold and there written down value especially the small ones, nor is there a need too, provided a fixed asset register is maintained. We inspire our clients to review their fixed asset registers as a minimum on an annual basis’ to ensure they are reporting their assets accurately, maximizing their deductions as far as out of date or discard assets and maximizing their business assessment.
Responsibility for Fixed Asset Register
It is the responsibility of the Finance or Accounts manager to maintain a complete and accurate fixed asset register. Fixed assets register will be managed on an excel spreadsheet or a book and should have the following details:
- Identification or serial number
- Procurement date
- Description of asset
- Class of asset
- Cost of procurement
- Accumulated depreciation
- Netbook value
Computing for Fixed Assets Addition
- Recording and payment for the procurement of fixed assets shall be as per payment methods.
- On delivery, the asset shall be classified, identify and recorded in the fixed assets inventory register.
Computing for Disposal Assets
- The board of organization must approve disposal of fixed assets. No assets should be disposed of without the written authorization of the board.
- On the strength written authorization by the board, the management should invite a public proposal for the purchase of the asset.
- Receipt of a minimum of three proposals, the board should sit and adjudicate over the proposals. On completion of the sale to the winning bidder and on the strength of the board disposal authorization and adjudicated proposals, the finance manager and accountant shall prepare a journal to record the disposal and the bidder’s indebtedness. The journal will include an adjustment for the revaluation if any.
- If the disposal is a cash sale, the Accountant should issue a general receipt.
- At the board discretion, an auction may be conducted. Cash proceeds from the auction should be treated as above.”