Fixed Asset Register
A Fixed Asset Register (FAR) is a comprehensive accounting method used to keep track of a company’s fixed assets, which are long-term tangible pieces of property or equipment that a firm owns and uses in its operations to generate income.
The register typically includes information such as:
- Description of the asset
- Date of acquisition
- Asset cost
- Accumulated depreciation (the wear and tear on the asset over time)
- Net book value (the asset’s original cost minus accumulated depreciation)
- Location of the asset
- Asset class (such as machinery, land, buildings, etc.)
A Fixed Asset Register is important because it allows a business to keep track of details of each fixed asset, ensuring control and preventing misappropriation of assets. It also keeps track of the depreciation of assets and helps a business calculate taxes based on the value of its assets.
Example of a Fixed Asset Register
Here’s a simple example of a few entries you might find in a Fixed Asset Register.
| Asset ID | Description | Asset Class | Acquisition Date | Initial Cost | Accumulated Depreciation | Net Book Value | Location |
|---|---|---|---|---|---|---|---|
| 001 | Dell Computer | IT Equipment | Jan 01, 2023 | $1,000 | $200 | $800 | Office Room 101 |
| 002 | Office Desk | Furniture | Jan 15, 2023 | $500 | $50 | $450 | Office Room 101 |
| 003 | Toyota Hilux Pickup | Vehicles | Feb 10, 2023 | $20,000 | $4,000 | $16,000 | Parking Area |
Note that the above table is greatly simplified. A real Fixed Asset Register could contain many more columns (for details such as the method and rate of depreciation, date of last valuation, expected lifespan of the asset, etc.) and would contain many more rows – potentially thousands, for a large company.
Also, the Accumulated Depreciation would be updated regularly (usually yearly or monthly) as the assets age and lose value.
