Fixed assets are the tangible investments made by a company that is employed in its operations to produce revenue. Fixed assets including machinery, plant and equipment are sometimes referred to as the company’s “backbone” in manufacturing companies. Asset usage that is both efficient and effective leads to business success.As the name implies, fixed assets are long-term & fixed investments made by a business that is expected to be used for longer than a year. For the assets to be kept in good condition over the long term, replacements, maintenance, and/or additions are essential. Due to their high value, fixed assets require adequate internal controls to guarantee that they are well-maintained and utilized.It would be challenging for management to keep track of asset upkeep amid all normal business operations, which would lead to significant investment losses through extensive repairs and frequent replacements.
Fixed Asset Controls-: The following controls will have to be kept in place to ensure that there is no loss on account of assets:
- Preserve asset registries with information on the type, number, location, and depreciation rate.
- Frequently inspecting assets physically to check for signs of fraud or theft
- If there are any discrepancies with the asset list, discuss them with management.
- If the disparities are significant, a fixed asset audit by a third party.
We, the GSPU team, provide you with Fixed Asset Management services ensuring that your fixed assets are properly maintained.
OUR SERVICES
Support in the maintenance of Fixed Asset Register
We can help the management keep track of fixed assets and make sure the register is up to date at the head office, all subsidiary companies, and all other locations. Location, assets custodian, purchase date, the item code, the voucher number, the price, depreciation & its price charged, the disposal details (if any), the assets reference number, etc. are all included in the HO Register. Fixed asset code number, date of acquisition, cost price, and transfer/disposal/sale data with a date will all be listed in the divisional registers for fixed assets.
A review of the Client’s fixed asset register
We will analyze the client’s fixed asset registry and, if necessary, suggest modifications to the management. We’ll make sure the Register contains the entire information essential to maintaining the assets properly. To the greatest extent practicable, the location specified in the register will be cross-verified to verify that the management has effective control over the assets. Our staff will physically confirm the presence of the assets listed in the Register and, to the degree feasible, note it in the register.
Teaching the employees how to raise indent
The team will receive a briefing on how to submit a request for a new fixed asset, including information on the types of fixed assets that already exist, the necessity for purchase, and the expected cost of the desired purchase. The division manager will draught an analysis outlining the names and addresses of suppliers, the items’ descriptions, costs, payment conditions, credit period, and reasons for the supplier’s selection.
Supervising the accounting of Fixed Assets
Fixed asset accounting will be closely monitored to ensure accurate ledger generation for each asset class, depreciation computation, and accounting for asset acquisition and disposal. Depending on the type of business, several asset classes could include furniture and fixtures, tools and equipment, computers/software, buildings, etc. After discussion with the management and assessment of the asset’s nature, kind of use, and replacement value analysis, the depreciation rate will be decided. We will monitor the entries made by the accountant to ensure IFRS compliance.
Accounting of Revalued Assets
We will make sure that the assets that have been revalued using the qualified value are properly accounted for and allocated to the revaluation reserve. Additionally, we will confirm that the revised depreciation on these assets is calculated following the Standards.
Asset Tagging
We may help the client tag their fixed assets by giving each one a unique asset barcode or RFID tag, which will update the system with information about their actual location. The tagged assets will be compared to the list of existing assets, and if any discrepancies, they will be noted. Asset tagging will pay for itself over time because it will reduce the risk of loss or theft and leave a complete trail of all assets.
Proper classification of Capital work-in-progress
To ensure that the correct value of an asset is reflected in the books, we will make sure that the capital work-in-progress is transferred to the proper asset head upon completion, that expenses are classified and distributed appropriately, and that the entire asset value is recalculated. We will double-check that the costs are directly related to the definition of fixed assets, that other costs are deducted, and that the transfer of assets from WIP occurred at the appropriate time.
Physical Verification
Our experts will come to your location and undertake fixed asset verification to make sure the assets listed in the books are present on the company’s property or in its custody. Additionally, we will evaluate the current control procedures, compare them to best business practices, identify any gaps, and then produce a report on adjustments that need to be made.