Definition of Fixed Assets Register
Fixed Assets Register contains the lists of the fixed assets (non-current assets) of the business organisation. Every details of the fixed assets maintain in fixed assets register. The details includes the name of the department where the fixed assets are located, the types of the assets, and other non-financial information like chassis number, security codes are also maintained. Fixed Assets Register also maintains the financial information of the assets.
Purpose of Fixed Assets Register
Fixed Assets Register mainly maintained for internal control purposes. Through this register management may get total information regarding capital assets. This register also allows the business to trace from its ledger accounts for the non-current assets to individual assets.
Fixed Assets Register may reduce the chances of misappropriation of fixed assets and updated the information about the assets life and its productive capacity.
Fixed Assets Reconciliation Technique
Fixed Assets Register to be reconciled yearly. Net carrying amount mentioned in the fixed assets register should be reconciled with the nominal ledger accounts maintained by the company.
The reconciliation technique of the fixed assets register are as follows:
|Assets at cost/ value as per nominal ledger||****|
|Accumulated Depreciation as per Nominal Ledger||(***)|
|Total of Net Carrying amounts listed in Fixed Assets Register||***|
Any difference between fixed assets register and nominal ledger accounts should be investigated and corrected. These usually arises from the computational errors or from the items being taken out of the assets register. Following would be the possible reasons for the difference between the ledger:
- Assets have been stolen, damaged or scrapped (for nil proceeds)
- Assets would be obsolete
- There are new assets that are purchased but not recorded in the fixed assets register
- There are enhancement which is not yet recorded in the assets register
- There are errors in the register
Contents of Fixed Assets Register
Following information to be maintained in the Fixed Assets Register:
- The internal reference number – for physical identification purposes
- The serial number of manufacturer – for maintenance purpose
- The clear description of the assets
- The location of the assets
- The department using the assets
- Purchase date of the assets (to calculate depreciation)
- Additional/ Extension cost of the assets.
- Depreciation methods and estimated useful life of the assets (to calculate depreciation)
- Revalued amount of the assets
- Carrying amount of the assets