Fixed Asset Audit & Verification Services

Q: What is a fixed asset register and why must it be kept accurate?

A fixed asset register records all capital assets including description, acquisition date, cost, accumulated depreciation, net book value, location, and status. Accuracy is essential for depreciation calculations, insurance valuations, tax computations, and balance sheet disclosures.

Q: What are ghost assets and how does a fixed asset audit identify them?

Ghost assets appear in the fixed asset register but no longer physically exist — typically assets lost, stolen, scrapped, or disposed of without a write-off. A fixed asset audit identifies them by physically verifying each item in the register and flagging those that cannot be located.

Q: What is the difference between book value and replacement value in asset verification?

Book value is cost less accumulated depreciation. Replacement value is the cost of replacing the asset at current market prices. Fixed asset audits work with book values for accounting; insurers often require reinstatement values for coverage purposes.

Q: Can fixed asset verification be done across multiple locations simultaneously?

Yes. We coordinate simultaneous or sequential verification across all locations, ensuring a consistent approach and preventing assets from being moved during the process. A consolidated report is prepared covering all locations.

Independent Physical Verification of Plant, Machinery, Equipment, and Other Fixed Assets

A fixed asset audit is a structured physical verification of a company's tangible fixed assets — plant and machinery, equipment, vehicles, computers, furniture, and other capital items — against the fixed asset register. It confirms that assets recorded on the books physically exist, are in working condition, are correctly identified and tagged, and are properly classified and valued.

Fixed asset inaccuracies can lead to incorrect depreciation, inflated balance sheets, misstated tax computations, and the continued capitalisation of assets that have been scrapped or disposed of. Our fixed asset audit and verification services are designed for manufacturing companies, large offices, hospitals, educational institutions, and any organisation with a significant capital asset base. This forms part of our comprehensive stock audit services and works alongside our inventory stock audit and warehouse audit for businesses requiring complete physical asset assurance.

Our Fixed Asset Audit Services

Physical Asset Verification

On-site physical inspection and identification of each fixed asset against the fixed asset register, confirming existence, location, condition, and asset tag or serial number.

Fixed Asset Register Reconciliation

Reconciliation of physically verified assets against the fixed asset register, identifying assets not found during verification and items found that are not recorded.

Asset Tagging & Coding

Assistance with physical asset tagging using barcodes, QR codes, or sequential numbering to enable accurate tracking and future verification exercises.

Depreciation Review

Review of depreciation rates and methods applied against the Companies Act Schedule II or applicable accounting standards, and identification of assets that may need adjustment.

Idle & Scrapped Asset Identification

Identification of assets that are idle, fully depreciated but still in use, scrapped but not removed from the register, or disposed of without proper write-off.

Capital vs Revenue Classification

Review of capital expenditure records to ensure that items correctly classified as fixed assets and items that should be expensed have been treated appropriately.

Benefits of Fixed Asset Audit & Verification

Ensures the fixed asset register is accurate, complete, and up to date
Prevents continued depreciation on assets that have been disposed of or scrapped
Supports correct tax depreciation claims and avoids disallowances
Provides lenders and insurers with a verified asset base for financing and coverage
Identifies ghost assets — assets on the register that no longer physically exist
Strengthens control over capital expenditure and asset lifecycle management

Frequently Asked Questions

What is a fixed asset register and why must it be kept accurate?

A fixed asset register is a detailed record of all capital assets owned by a business, including their description, date of acquisition, cost, accumulated depreciation, net book value, location, and status. Accuracy is essential because the register is the basis for depreciation calculations, insurance valuations, tax computations, and balance sheet disclosures. Inaccuracies lead to misstated financial statements and incorrect tax filings.

What are ghost assets and how does a fixed asset audit identify them?

Ghost assets are items that appear in the fixed asset register but no longer physically exist — typically assets that have been lost, stolen, scrapped, or disposed of without a corresponding write-off in the accounts. A fixed asset audit identifies ghost assets by physically verifying each item in the register and flagging those that cannot be located. Continuing to depreciate ghost assets overstates expenses and understates profits.

How often should a fixed asset audit be conducted?

Most businesses conduct a comprehensive fixed asset verification every one to three years. Businesses with high asset turnover, multiple locations, or significant additions and disposals in the year may benefit from annual verification. At a minimum, management should ensure that all additions and disposals during the year are correctly recorded, with a full physical verification conducted at regular intervals.

What is the difference between book value and replacement value in asset verification?

Book value is the cost of the asset less accumulated depreciation as recorded in the accounts. Replacement value (or reinstatement value) is the cost of replacing the asset at current market prices. Fixed asset audits typically work with book values for accounting purposes, but insurers often require reinstatement values for insurance coverage. We can assist in identifying the basis on which each asset is valued and flagging where valuations may need review.

Can fixed asset verification be done across multiple locations simultaneously?

Yes. For businesses with assets spread across multiple factories, offices, or branches, we coordinate simultaneous or sequential verification across all locations. This ensures a consistent approach and prevents assets from being moved between locations during the verification process, which can distort the results. A consolidated report is then prepared covering all locations.

Stop Depreciating Assets That No Longer Exist

Accurate, independent fixed asset audit and verification for businesses of every scale.