Assets not captured in fixed asset register

An asset that is fully depreciated and continues to be used in the business will be reported on the balance sheet at its cost along with its accumulated depreciation. There will be no depreciation expense recorded after the asset is fully depreciated. No entry is required until the asset is disposed of through retirement, sale, salvage, etc.

To illustrate this, let’s assume that a machine with a cost of Rs.100,000 was expected to have a useful life of five years and no salvage value. The company depreciated the asset at the rate of Rs.20,000 per year for five years. If the machine is used for three more years, the depreciation expense will be Rs.0 in each of those three years. During those three years, the balance sheet will report its cost of Rs.100,000 and its accumulated depreciation of Rs.100,000 for a book value of Rs.0.

Hi Nayana,

I understood your case. The management might have forgotten to record in fixed asset register when the asset was purchased. If the management has intention to dispose of that fixed asset, it shall be disclosed seperately as per AS 10. Since its been depreciatied fully. It should be shown in Books of accounts until it is disposed off. It should also be entered in fixed asset register since its title still remains with the company.

Dear All,

Thank you for your reply. I would like to futher clarify the discussed issue.

The major issue pertaining is that a few assets on random sampling were not traceable in the fixed assets register.Since they were purchased long time back, there exists drawbacks in the accounting system to trace them according to their ledger entry.These assets might have been fully depreciated if they had been recorded correctly. The management does not have an optimum solution to trace these assets for which AMC is also paid. Kindly advice how the management should do in such a situation. Would it lead to understatement of assets?

P.S: The volume of fixed assets are very high and highly dispersed and not located at a single place.

Thanks.

Fixed Assets Register is an important Document an Auditor has opin on the Assets of the Company. The Management has to update it from where the omiissions or commissions happening how large it be.

but if you are tellin that , assets have not been recorded in the books of company, then profits of the previous year have been overstated and so is the previous year, moreover, The Stat auditor must have highlighted this issue under CARO 227(4)(i) since the company has not maintained fixed asset register.