Thursday, December 10, 2009

(47)-THE FIXED ASSET REGISTER AND THE NOMINAL LEDGER

The Fixed Asset Register and the Nominal Ledger

The fixed assets register is not part of the double entry and is there for memorandum and control purposes.

The fixed assets register must be reconciled to the nominal ledger to make sure that all additions, disposals and depreciation charges have been posted.

For example, the total of all the cost figures in the register for motor vehicles should equal the balance on the motor vehicle cost account in nominal ledger. The same goes for accumulated depreciation.

The fixed asset register and the physical assets

It is possible that the fixed assets register may not reconcile with the fixed assets actually presents. This may be for the following reasons,
  • Asset has been stolen or damaged, which has not been noticed or recorded
  • Excessive wear and tear or obsolescence has not been recorded
  • New assets not yet recorded in the register because it has not been kept up to date
  • Errors made in entering details in the register
  • Improvement and modifications have not been recorded in the register

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