F is for Fixed Assets - A to Z Accountancy Top Tips
Nearly all businesses will have fixed assets, but you may not realise what the fixed assets are in your business.
What is a fixed asset?
A Fixed Asset is something that a business:
- gets with the intention of keeping for a long-term period and not reselling.
- uses to generates income.
- Usually visible and has a significant value in (e.g., land, buildings, furnishings, computer equipment etc.)
What is a Fixed Asset Register?
A fixed asset register is a list of all the fixed assets the business owns, and it usually includes useful information about the asset.
A basic fixed asset register would include useful information such as:
- Date of purchase
- Details of what the asset is – this can go as detailed as the unique ID number or product number for tracking.
- Cost
- Life expectancy – How long you expect it to last
- Depreciation – The reduction in value over the time of its life
Maintaining a fixed asset register can benefit even a small business
It may sound dull but creating and maintaining a fixed asset register benefits the business in various ways.
- Meets statutory requirements
- Makes year end figures easier
- To keep track of assets
- Prevent theft
- Help with cashflow planning – when they might need replacing
- Budgeting repair costs
- Easy to keep track of values
- Easy to calculate depreciation
- Used to determine the value of the business
This can be set up on excel – please email for a free template.
If you use software like Xero, this has a brilliant fixed asset register built in, which is easy to set up and maintain throughout the year and run deprecation for you. Making it easier for more accurate management of accounts and quicker year-end figures.
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