What are Fixed Assets? Fixed Assets are the known tangible assets or property, plant and equipment. They are the assets and properties that can be quickly converted to cash. They appear in the balance sheet as property, plant and equipment (PP&E).
Why is Fixed Asset Verification important for your business? Read on to find out!
- It helps you acquire accurate financial reporting, business valuation and an in-depth financial analysis.
- It helps you record, depreciate and dispose assets, and the analysts can use it for their study on the corporation’s financial statements.
- It helps determine if the organization is profitable or not.
- Once the Fixed assets are verified, it’s easier to determine the plan of action for the depreciated assets.
- Maintenance of Fixed Assets is also equally important for enhanced growth, so maintenance costs have to be deciphered before you accentuate asset maintenance.
What are the best practices for fixed asset verification?
- Automation is the way to go, gone are the days of manual stock recording. It increases accuracy and saves time and money.
- Physical goods should be placed in a way that they ensure minimal damage, and probably with the use of stock pallets and boxes.
- It’s important to know the exact location of the Fixed Assets, and to avoid redundancy, every item should be marked by way of digital or physical controls. There should also be restricted movement during physical verification.
- If there are any vital changes to placement of assets, they should be recorded and updated in the books.
PKF UAE assists its clients in creation and regular maintenance of the fixed asset register. We also undertake verification of fixed assets in auditing for the existing assets, along with classifying them under various categories for an easier identification and reconciliation of their values with the balance sheet. We also provide assistance in their coding for seamless integration in accounting records. Contact PKF UAE if you would like to get your physical assets tagged, reconciled and a detailed fixed asset register compiled.