How to Audit Fixed Assets
Here are some general guidelines for How to Audit Fixed Assets. Asset Panda makes it easy to audit your fixed assets with your mobile devices. Our clients save a significant amount of time and money by using Asset Panda. Find out how much you could save by visiting our ROI Calculator https://www.assetpanda.com/roi/.
Auditing fixed assets is important to ensure that accounting for capital assets and depreciation is in compliance with your organizations objectives and Asset Panda can help.
Before you can begin to audit fixed assets, it’s important to understand the core terminology:
- Capital Assets – Equipment, property, furniture, fixtures and leasehold improvements (see definition below) that are acquired by the company in the normal course of business. Capital assets have a useful life of at least one year. Computer software purchased for internal use is considered a capital asset. Computer software internally developed for internal use or for resale is not addressed in this policy statement. You can create as many custom fields, reports and actions as you need to adapt Asset Panda to your unique environment.
- Repairs and Maintenance – Expenditures made to physically maintain an asset in usable condition without extending its useful life or significantly increasing its capacity. All repair and maintenance can be tracked in Asset Panda as well. Example: Employee is using equipment that requires repair. They scan the barcode or QR code on the asset and select the action Repair. Asset Panda then takes routes the information to the appropriate people to initiate the repair.
- Installation Costs – Expenditures made to third parties to place an asset in service. Asset Panda is mobile and available to anyone associated with your assets. Therefore, the repair is techs can have access to the app and the assets to update any information you require regarding installation including costs and other details.
- Freight – Expenditures made to transport the asset to the asset's resident location. Asset Panda has a section for locations so you can track your assets location over time. This includes the ability to track via GPS on the phone pulled from a photograph. You can make a GEO map using Google maps to give a visual representation of where you are assets are at any given time.
- Sales Tax – Any state and local sales tax applied to the purchase value of an acquired asset.
Next, identify your most valuable assets and create a policy based on a set cash threshold:
For All Items Other Than Software:
A single item of tangible property with a gross (including sales tax, freight and installation) cost of $_____ or more will be capitalized .
A single package with a gross cost of $_____ (or local currency equivalent) or more will be capitalized.
Items which do not meet the requirements for capitalization should be expensed through one of the following major GL accounts: Next, establish a depreciation schedule for your fixed assets. Once you have a depreciation timetable, create a retirement and disposal policy. Upon determination that an asset has been sold or otherwise disposed of, the asset's cost and associated accumulated depreciation should be removed from the general ledger and fixed asset subledger. Also, all asset dispositions should be approved by the department controllers responsible for those assets PRIOR to the disposition. An asset disposal form is required to effect any retirement. Each business unit controller is responsible for submitting the form to general ledger accounting prior to any disposition. Next, determine which assets can – and cannot – be transferred. Individual assets may be transferred as appropriate between departments.
Asset Panda makes tracking your and Auditing your fixed assets simple using the smart phones your employees all ready carry.
Start a FREE 14 day trial today!!! Visit www.assetpanda.com to learn more.