Fixed asset management is a secretarial process that seeks to track fixed assets for valuation, financial accounting, precautionary maintenance, and theft prevention.
Organizations face significant challenges to track the location, quantity, condition, maintenance, depreciation status and valuation of tangible assets. A common approach to monitoring these fixed assets is to use serial numbered asset tags, which are essentially labelled with bar codes for easy and accurate reading. The proprietor of the assets can then take up inventory with a bar code reader and generate a statement.
Off-the-shelf software suites for fixed asset management are advertised to businesses - both small and large. Some organizational resource planning systems are available with specific fixed assets modules.
Some tracking techniques automate the process, such as using fixed scanners to read bar codes or by affixing a radio-frequency identification (RFID) tag or label on an asset.
Here is a primary list of things, which should be retained when maintaining this register, such as:
The physical verification is usually performed at the year-end or the end of the report date of statements. Asset management services facilitate the physical verification of fixed assets, meaning auditors have to perform a physical check to confirm the existence of certain tangible assets, otherwise recorded in the client’s financial statements.
Asset tagging is the practice of affixing identification tags or labels, also known as asset tags, to company assets. Asset tagging is utilized for both fixed and moveable assets to recognize individual assets.
Usually, asset tags printed with barcodes are scanned using a hand-held barcode reader or smartphone fitted with a barcode scanning application, permitting users to obtain and document data regarding an asset’s location, maintenance history, or other details.
Reconciliation is an accounting process which compares two sets of records (i.e. Far and PV data) to ensure that the presented figures are accurate and in agreement. Reconciliation is a critical process to identify the money trail during an asset management audit.
The statement of fixed assets reconciliation shows a summary of book value, credits, debits to fixed asset accounts, and accumulated depreciation which is vital in reconciling balance sheets and maintaining fixed asset register.
Construction and maintenance of fixed asset registers are usually done based on PO, invoices, and other related documents provided by the client.
Maintenance of fixed asset register (FAR) can be tedious and complicated due to the involvement of different regulatory and compliance obligations in each country and for different currencies. Generally, maintenance of fixed asset register (FAR) is asserted as per the company’s policy, and country-specific regulatory requirements.
If the merging of holding company and its subsidiaries (whether domestic or foreign) is necessary by applicable company laws, and related Accounting Standards, the task may become a bit more complicated. The crucial point is associated with the selection of the exchange rate for conversion/transition of fixed assets. Typically, most companies either use average annual rate or year-end exchange rates.
Stock or inventory audit is a word that refers to the physical verification of a company or institution’s inventory assets. There are different types of stock audits depending on the purpose, and as every stock audit requires a different approach.
Predominantly, every business institution needs to perform a stock audit at least once a year to update and make sure that the physical stock matches with the computed stock. Additionally, a stock audit helps correct discrepancies between the material stocks while correcting book stocks.
A Standard Operating Procedure (SOP) is a determined set of step-by-step directives compiled by an organization or asset management services to assist employees in carrying out complex routine operations.
SOPs aim to accomplish efficiency, quality production and consistency of performance while reducing miscommunication and failure to abide by industry regulations. Some relevant SOPs are:
At TRC Corporate Consulting, we have proven knowledge and experience in administering large-scale and multifaceted projects within agreed timelines. Our fixed asset management team delivers solutions for a wide range of purposes including asset verification, physical verification reconciliation, designing of SOP etc. Our priority is to always ensure that you get accurate results within specified deadlines. We are renowned for establishing the best practices for fixed asset management services. For any queries or understanding, contact our team!
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