What is the best way to record the fixed assets? Some assets are easy to differentiate, for e.g Motor Vehicles because every car can be uniquely identified. However, for other assets such as computers, monitors, cupboards and assets like these, how can we uniquely record these. The problem shall arise at the time of disposal of such assets. Then it will not reflect the true and fair picture of the assets.
Would really appreciate if any one can guide me on how to uniquely record the assets.
Following steps should be taken in order to record assets in the best way
*Formulate a policy defining the amount that should be capitalised as asset and the amount below which i would not be capitalised rather than expensed out.( a monetary thereshold)
*tag all assets
*maintain perpetual record of all assets.
*Invoices shall documentation of alll assets shall be adequetely preserved.
*On regular Basis checking shall be done some on the basis of floor to tag and others from Tag to floor and difference if any shall be written off.
*if u follow all the above steps you wont have issues at the time of disposal
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Omeir</i>
<br />What is the best way to record the fixed assets? Some assets are easy to differentiate, for e.g Motor Vehicles because every car can be uniquely identified. However, for other assets such as computers, monitors, cupboards and assets like these, how can we uniquely record these. The problem shall arise at the time of disposal of such assets. Then it will not reflect the true and fair picture of the assets.
Would really appreciate if any one can guide me on how to uniquely record the assets.
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Omeir
The best way to deal with the Fixed Asset recording is by implementing TR-6 issued by ICAP on fixed asset register. That should solve your problem.
Regards
Yeah good Reply....TR-6 is very Deep and extensive!!!
thanks for refreshing my memory friend!!!
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by aukhan</i>
<br />Omeir
The best way to deal with the Fixed Asset recording is by implementing TR-6 issued by ICAP on fixed asset register. That should solve your problem.
Regards
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Aukhan
Thanks for the info. Can you please guide me where can I fine TR-6
You are welcome
you will find it on icap website
as follows
http//www.icap.org.pk/web/openfile.php?url=TRs/Tr-6.htm&id=308
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Omeir</i>
<br />Aukhan
Thanks for the info. Can you please guide me where can I fine TR-6
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ACCOUNTING
TR â 6 (Reformatted 2004 )
FIXED ASSETS INVENTORY AND RECORDS
1. THE ISSUE Section 230 of the Companies Ordinance, 1984 requires every company to keep proper books of accounts with respect to all assets of the company. Usually fixed assets comprise a significant portion of a companyâs assets. No guidance is available for companies as to how the fixed assets records be maintained. Accordingly, it is felt that guidance may be given to our members. Following are important aspects, which require maintenance of proper records that help in preparation of Financial Statements
(a) Periodic reconciliation of the underlying records of fixed assets with the accounting records (General Ledger).
(b) Reconciliation of the periodic physical inventory of fixed assets with fixed assets records.
© Determination of cost and accumulated depreciation of each item of fixed assets at the time of retirement or disposal.
2. TECHNICAL COMMITTEE RECOMMENDATIONS
2.1 Fixed Assets records
Adequate itemized record of fixed assets should be maintained which at minimum must indicate following particulars
(a) detailed description of each item
(b) original cost of the item
© date of its acquisition
(d) classification of the item
(e) the location and/or the custodian of the item
(f) the rate of depreciation
(g) accumulated depreciation
(h) depreciation charge for the period
(i) the department / cost center / product to which the depreciation is charged
(j) date of revaluation (if any)
(k) revalued amount (if any) of the items
(l) depreciation on revalued amount
(m) accumulated depreciation on the revalued amount
2.2 Physical inventory of fixed assets Physical verification of fixed assets should be carried out on a cyclical basis (perpetual inventory) according to a formal plan once in five year. The physical inventory should be reconciled with the fixed assets records and adjusted accordingly.
(165th and 166th meeting of the Council â July 30-31 and September 17-18, 2004)