Concept of Fixed Asset Control -- 30286

Concept of Fixed Asset Control

Fixed Asset Control is the application of Administrative Techniques and Accounting Procedures.

- Administrative techniques vary from company to company.

- Accounting Procedures are the same for all companies.

- Using the Chart of Accounts, we determine the accounting path to follow.

We have to establish:

1- Standards - Objectives

                   Application Fields

                   Determinations - establish criteria

                   Supervision - determine who will monitor the application of the Standards/Review

The standards cannot be fixed, so it should be determined when and how they will be reviewed.

2- Asset Inventory:  List all the assets in the company and compare the list to what is registered in the Accounting department.

List those assets that are in the Accounting record and do not exist physically.

List what you have physically and is not registered in Accounting.

3 - Make Accounting Entries for Adjustment.

For cases in which the asset exists physically and has no Accounting Record

Debit - Fixed Asset

Credit - Accrued Profit/Losses (amount stipulated by Technical Report).

Credit - Other non-operational revenues.

In the case of a loss of asset, the posting will be made as usual, but it will be recorded as a loss.

4- Open the asset's record; no standard exists for the layout.

Determine the code of the asset; this should be clear and objective;

For small businesses, it is recommended to use the Chart of Accounts;

For large companies, make a Chart of Accounts for the asset (assets file).

5 - Term of Responsibility: list the assets of each department whose person responsible signs the Term of Responsibility.

6 - Insure the company's assets.

7 - To transfer goods within the company, notify the person responsible for the Fixed Asset.