Fixed assets register & physical verification

Internal Audit 4959 views 3 replies

PRABHAKAR

SERVICE

34 Points Joined December 2008

hi there,

Our client maintains at H.O (where accounting activities takes place), a summarised fixed assets statement for showing gross block, addition, depreication & net block.. However in the absence of any rules on capitalisation they expense out items costing more than Rs. 5,000 also. Thus their (H.O) fixed assets statement wont match with the physical assets available at various branches. Their contention is that since branches maintain fixed asset register, the physical assets should not be compared with fixed asset register at H.O.

Can you please advise me on this, whether H.O is right in saying that they need not maintain F.A register as branches keep. I have a doubt, what abt internal control since branches only have custody of assets, do physical verification, maintain F.A register.

what are the rules and standards say on this.

Replies (3)

Manoj Khandelwal

Practice

347 Points Joined August 2009

Whether branch maintains or not the F.A. register but H.O. should maintain F.A. register in which Branch fixed assets should also be included.

Manoj Khandelwal

Practice

347 Points Joined August 2009

For better intenal control FA register should be maintained at branch as well as HO and the FA costing more than should be capitalised.

manzoor ahmed

Auditor

479 Points Joined February 2010

Originally posted by : PRABHAKAR
	hi there, Our client maintains at H.O (where accounting activities takes place), a summarised fixed assets statement for showing gross block, addition, depreication & net block.. However in the absence of any rules on capitalisation they expense out items costing more than Rs. 5,000 also. Thus their (H.O) fixed assets statement wont match with the physical assets available at various branches. Their contention is that since branches maintain fixed asset register, the physical assets should not be compared with fixed asset register at H.O. Can you please advise me on this, whether H.O is right in saying that they need not maintain F.A register as branches keep. I have a doubt, what abt internal control since branches only have custody of assets, do physical verification, maintain F.A register. what are the rules and standards say on this.

Dear, Assets recorded in the Fixed assets register should be available in the physical, i think this is the substantive issue, even a asset is fully depreciated it should not be deleted from the register, and capatilization policy differs company to company you should check out the materiality, if it is material and it is according to the IAS 16 it should be capatilised.

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