FA Verification

Guidance Note on Audit of Fixed Assets

Sir,

Thanking you for your reply. I need to know about the compliances and procedures for  physical verification of asset.

pls forward the same to all

Dear All, Can I get the full tesxt of Guidance Notes on Audit of Fixed Assets.

Here it is..:)

Thanks for the file

Hi Dear,

Thanx for updation.

But I have another query,

Where the co is providing depreciation for law value as follows

Assets costing Rs 5000/- or less are fully depreciated fully in the year of purchase. It is mandotory for the company to route such assets through Fixed Assets register.

Regards,

C S Agarwal 

ICAI Statement on CARO 2004 states as follows:-

Schedule XIV to the Act provides that depreciation on assets, whose actual cost does not exceed rupees five thousand, shall be provided at the rate of hundred percent.  The records of fixed assets should include the necessary particulars in respect of such assets also.  However, Schedule XIV to the Act further provides that where the aggregate cost of the individual items of plant and machinery costing Rs. 5000/- or less, constitutes more than 10 percent of the total actual cost of the plant and machinery, the same would have to be depreciated as per rates of depreciation provided in item II, Plant and Machinery, of the Schedule.  The auditor should, therefore, examine whether the company has an appropriate mechanism in place to ensure compliance with this provision of Schedule XIV.

So, in this case it is recommended to include details related to these assets as well.

Thanx for the clarification

Hi all,

Whether depreciation on installation of electricity to be provided as per dep rate of Schedule XIV i.e., 1.63 % on SLM or there is different rate of depreciation for electrical installation in office building

Confirm the following points while doing fixed assets verification:-

1)That the assets were in existence on the date of balance sheet

2)That the assets had been acquired for the purpose of the business and under proper authority

3)That they were free from any lien or charge not disclosed in the balance sheet

4)Verification of documents pertaining to assets

5)Depreciation on assets

6)Verification of existence of assets

7)Examine details of the cost of additions debbited to these accounts so as to ascertain only cost of genuine additions has been debited to such accounts