Skip links

Common Issues with Fixed Assets Management

Tracking of fixed assets through its lifecycle is very important for any organization.
An organization with a large number of fixed assets is required to tag, track, account, and reconcile its asset, which is vital in monitoring assets throughout their lifecycle across locations.

Fixed Assets Accounting Issues

  • General Ledger and Fixed Asset Register (FAR) mismatch.
  • Independent asset wrongly accounted as a single purchase
  • Already scrapped assets still appearing in the books (physically not available)
  • Improper accounting of spares: Significant spares been written off or consumables being capitalized
  • Asset transferred from original premises to other premises. However, costing is computed to products produced in the original premises
  • Not recorded under appropriate asset class resulting in incorrect deprecation

Fixed Assets Tracking Issues

  • Asset Addition– purchased but not recorded in FAR
  • Asset Deletion- Asset disposed of/ Sold but not recorded in  FAR
  • Asset Movement– Assets have been moved without any documentation or audit trail
  • Idle and obsolete assets are still treated as good
  • Changes in fixed asset recording practices over the years have not been given effect to the FAR
  • Absence of periodic audits
  • Asset with no tags/ serial number/ proper description in FAR- Those kinds of assets are difficult to track
  • Absence of Fixed Asset Management Software

Incomplete Fixed Asset Register

  • Detailed asset descriptions may not have been updated in the FAR such as the Model number and Serial Number, Manufacturer name, etc.
  • Asset location may not have been updated in FAR
  • Custodian of asset may not have updated in FAR
  • Asset tracking will be difficult with incomplete FAR

Absence of Standard Operating Procedure

  • Absence of Fixed Asset Management Policy
  • Asset Procurement/ Deploying issue – In absence of SOP, the purchase of assets and deploying/ installing on time place will be more difficult.
  • No visibility on Transfer/ Disposal of Asset- In absence of SOP.

At MCA, with our in-depth experience, we help clients in streamlining their fixed asset function.

We have physically verified and tagged ~1 million assets, streamlined the Fixed Asset Management function including the Largest E-Commerce player in the MENA region, the Largest Optical Company, other large Government entities amongst others.

Fixed Assets Management Solution

  • Exhaustive physical asset identification, verification, recording & Tagging
  • Gathering supporting documents for the existing Fixed asset register
  • Reconciliation and mapping of assets with supporting documents
  • Asset value allocation and creation of Fixed Asset Register
  • Preparation of Fixed Asset Policy and SOP’s
  • Asset Management and Tracking Platform with the integration of ERP, and user training.

Download our Fixed Asset Management Profile to know more.

Download PDF