Maintain Fixed Assets Register

Fixed Assets Register

It is the responsibility of the Finance/Accounts manager to maintain a complete and accurate fixed asset register. The fixed assets register will be maintained on an excel spreadsheet or a book and should have the following details:

• Identification or serial number.
• Acquisition date.
• Description of asset.
• Location
• Class of asset
• Cost of acquisition
• Accumulated depreciation
• Net book value

The Finance/Accounts manager should ensure that all the assets are tagged with identification codes. All the classes should commence with the prefixes itemized below followed by a unique 3 or 4 numerical numbers for each specific item. E.g. an office desk at the reception will fall under the furniture and fitting class and will be identified by the code XYZ/FA/OD/) 001 where:-

• FA – Fixed Asset
• FF – Furniture & Fittings
• OD – Office Desk
• 001 – Unique for Desk at the reception

Processing Depreciation

• At the end of every month, the Accountant should prepare a depreciation schedule for each of the items using depreciation rates described in sub-section.
• The Finance manager should review the schedules and sign them as evidence of the review. On the strength of the duly reviewed depreciation general journal, the accountant shall update the fixed assets register.

Accounting for Fixed Assets Addition

• Recording and payment for the acquisition of fixed assets shall be as per payment procedures.
• On delivery, the asset shall be classified, tagged and recorded in the fixed assets inventory register.

Accounting for Disposal of Assets

• The board of organization must approve disposal of fixed assets. No assets should be disposed of without the written authorization of the board.
• On the strength written authorization by the board, the management should invite public bids for the purchase of the asset.
• On receipt of minimum of three bids, the board should sit and adjudicate over the bids. On conclusion of the sale to the winning bidder and on the strength of the board disposal authorization and adjudicated bids, the finance manager and accountant shall prepare a journal to record the disposal and the bidder’s indebtedness. The journal will include an adjustment for the revaluation if any.
• If the disposal is a cash sale, the Accountant should issue a general receipt.
• At the board discretion, an auction may be conducted. Cash proceeds from the auction should be treated as above.
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