So you’ve discovered that it makes good business sense to have an asset register, but before you can wrap your mind around compiling your own comprehensive asset register for your business, let’s unpack what an asset register is, why it’s so important to have one, and how you can get started.

What is an Asset Register?

An asset register is simply a detailed record that clearly identifies all the fixed assets of your business, allowing you to quickly retrieve information about the assets at any given time.

It is important to be aware that fixed assets are long-term assets that your business uses regularly to produce income, such as land, property, machines, buildings, office equipment and vehicles.

Fixed assets are not assets that are considered as products to be sold.

Intangible assets such as patents, copyrights or brand names are also considered as fixed assets if you plan on owning them for more than a year.

Why is it Important to have an Asset Register?

Having an updated and accurate register readily available is very useful for tax purposes, insurance, fraud detection and prevention, accurate forecasting, succession planning, business valuation and for the overall management and control of your assets.F

A comprehensive asset register would include important details about your assets, as well as highlighting if they are leased assets, assets under construction or imported assets. Knowing whether your assets are still working and in your possession, is equally important to note when it comes to keeping a handle on your business practices.

Compiling your Asset Register – A Guideline to get you on the right track

Study your business balance sheet and create a list of all the fixed assets that are recorded – remember to include the intangible assets.

Perform a physical audit by walking around your company’s location to make sure that all the assets in the balance sheet are listed. If you discover an asset that is not on the books, confirm if the reason is because the asset’s value has depreciated, and thus no longer has any accounting value.

Once you have a detailed list of all of your fixed assets, you need to create the structure for your register. Decide whether you want to record your register physically in a dedicated folder, or digitally on a spreadsheet. There are many free online templates available for creating asset registers if you need help getting started.

Whether you have decided on a paper binder or a digital spreadsheet register, the following information, where applicable, should be recorded for each asset.

  • Serial number
  • Date of purchase
  • Purchase price
  • Insurance coverage
  • Warranty information
  • First day of service
  • Estimated life
  • Salvage or resale value
  • Depreciation method

Once your asset register has been successfully compiled, be vigilant about conducting periodic audits to both verify the accuracy of your register, and also to make any updates.

Assets that have been lost, stolen or are no longer functional, must be written off. Keep in mind that intangible assets with a finite life must also be amortised (written off) when their useful life has run its course. For example, a copyright is only as valuable for as long as the copyright lasts.

The Property Partnership specialise in asset valuations, as well as property, business, and plant valuations. Why not give us a call and let us assist you in keeping your fixed asset register current. Call us on 0860 999 440.