Assets register
An asset register allows you to keep track of your assets and provides a fair estimate of their worth. It meets your taxation, statutory and sale-of-business obligations. It is also an appropriate place to record serial numbers, make, model, etc.
Your organisation needs an asset register to:
- process the purchase of fixed assets in accordance with your organisation's authorisation and record-keeping procedures
- maintain an adequate accounting records of assets-cost, description, and where they are kept in the organisation
- maintain accurate records for depreciation
- provide management with information to help plan future asset investments
- record the retirement and disposal of assets.
You can start your asset register by recording all physical assets, regardless of the funding source.
The types of physical assets that need to be recorded include:
- office equipment
- motor vehicles
- furniture
- computers
- communications systems
- equipment
After that, check each asset item at least once a year.
As a general rule, record each asset separately. The exception is multiple assets that combine to perform one function if the value of the individual components is less than $3,000 but the total value of the asset is more than $3,000. Examples are personal computers consisting of a monitor, keyboard and central processing unit, or a set of books and periodicals.
Treat replacing assets as a maintenance cost. When the purchase cost is not known, record the asset at the cost of a comparable item at current prices.
Record assets in the register in the month they are purchased. The cost should include installation costs, computer cabling, transportation and other associated costs incurred to make the asset usable. Use purchase orders, invoices and delivery dockets to provide the detail.
You also need to record leased assets. There are two types of leasing arrangements: operating lease and finance lease. A finance lease finances the cost of a leased asset. These finance leases must be recorded in the assets register. An operating lease is when the leased item is 'given back' at the end of the lease period.
When you dispose of an asset-when you sell it, give it away or throw it away-update your asset register to include the date of disposal, the disposal amount and the method of disposal. Cease depreciation at the end of the month you disposed of the asset.
Treat trading in an asset as a disposal. When you sell an asset, record the proceeds in your financial records as well as your assets register.
Don't delete assets from your assets register until after the end of the financial year as the information needs to be incorporated into the annual statement of your financial position. At the beginning of the next financial year, record disposed-of assets separately.
The board need not involve itself directly with the conduct of the assets register, but must be satisfied that a reliable system exists and is adhered to.