A fixed asset is an item owned by a business and used to generate its income. For example the building from which a business can operate or a piece of machinery to create a product that is sold onto customers.
Depending on the type of business there may be a large amount of fixed assets or assets of particularly high value. In these cases a fixed asset register can help a business track what fixed assets it owns, changes in fixed assets, location of assets and asset values for insurance purposes.
What is a Fixed Asset Register?
A fixed asset register put simply is a list of fixed assets owned by a business. It includes details of each asset, its cost/value, location and depreciation method. Here are some examples of fixed assets that would typically be included on the fixed asset register:
- Office equipment;
- Cars, vans, lorries.
Why Keep a Fixed Asset Register?
A fixed asset register can be a useful piece of information to keep because it helps business owners track all of the fixed assets they have purchased, assisting them to:
- Ensure the correct value of fixed assets is registered on their balance sheet;
- A fixed asset register is a single document to use in reviewing the assets a business owns, their value and can help draw out the potential for fixed asset revaluation which strengthens the balance sheet;
- Act as a checkpoint to ensure an appropriate level of insurance is in place;
- Provide accountants with a complete list of fixed assets for tax purposes so they can check all capital allowances are claimed;
- A fixed asset register is a separate check point to help business owners detect fraud, theft and misappropriation of company funds;
- Help stay organised and avoid headaches at a later date for example when year end time comes or in the event of a tax inspection;
- Helping business owners track what they own to avoid buying twice or raise cash by selling off old or unused assets.
Example Fixed Asset Register Template in Excel
A fixed asset register in excel can take many different formats and designed to suit the specific needs of the business. Here is an example fixed asset register template in Excel.
First Steps to Building a Fixed Asset Register
Here are some steps you may want to take if you are building your Fixed Asset Register for the first time:
- Perform a physical audit by walking around and identifying every asset you own and noting them on your register.
- Decide on the base way to classify your assets and organise on your fixed asset register for example you may want to group asset according to location or type.
- Contact your accountant for a breakdown of fixed assets disclosed on your balance sheet and reconcile your Fixed Asset Register to check your accounts are correctly stated, depreciation is being calculated correctly and you have received capital allowances you are entitled to.