Last reviewed: July 2026.
The fixed asset register contains asset-level details, while the general ledger contains summarised financial balances. The two records must reconcile for cost, accumulated depreciation, impairment, revaluation and disposals.
A difference can indicate an interface failure, manual journal, unrecorded asset, duplicate asset or incorrect classification.
Different roles
| Record | Main purpose | Level of detail |
|---|---|---|
| Fixed asset register | Track individual assets and components | Asset ID, cost, date, location, life and disposal |
| General ledger | Produce financial-statement balances | Totals by account and asset class |
| Physical asset records | Confirm existence and condition | Tag, serial number, custodian and location |
Core reconciliation balances
Reconcile gross cost, accumulated depreciation, accumulated impairment, revaluation balances and construction in progress by asset class.
Additions reconciliation
Trace capital additions from approved invoices and project records to both the register and ledger. Confirm the asset was available for use and classified correctly.
Depreciation reconciliation
Compare system depreciation by class with the general-ledger expense and accumulated depreciation. Investigate manual overrides, incomplete lives and wrong start dates.
Disposals reconciliation
Confirm disposed assets are removed from both records, depreciation is updated to the disposal date and proceeds and gain or loss are recorded correctly.
Use the fixed asset disposal guide.
Revaluation reconciliation
Revaluation adjustments should update asset records, general-ledger carrying amounts, OCI and revaluation surplus. Deferred tax and subsequent depreciation must also agree.
Impairment reconciliation
Record impairment at the correct asset or cash-generating unit and ensure the register reflects the revised carrying amount used for future depreciation.
Construction in progress
Projects under construction remain outside normal depreciation until available for use. Reconcile project costs, transfers, abandoned projects and amounts that should be expensed.
Worked reconciliation example
The register shows machinery cost of 1,200,000 CU, while the ledger shows 1,230,000 CU. Investigation finds a 30,000 CU capital journal posted directly to the ledger without an asset record.
The correction is not simply to force the totals to agree. Confirm whether the expenditure qualifies as an asset, create the authorised asset record or reverse the journal.
Common causes of differences
- manual journals posted directly to asset accounts;
- failed or duplicate interfaces;
- assets recorded in the wrong class;
- disposals removed from one record only;
- different depreciation dates or methods;
- unrecorded transfers and components;
- spreadsheet formulas or mapping errors.
Monthly reconciliation process
- export register totals by class;
- extract general-ledger balances;
- compare cost and accumulated amounts;
- identify current-period movements;
- investigate every material difference;
- post approved corrections;
- retain preparer and reviewer evidence.
Asset IDs and ledger dimensions
Use consistent asset classes, departments, projects and locations. The ledger may not contain every asset ID, but mapping should allow class totals to agree.
Physical verification
Reconciliation proves numerical agreement, not physical existence. Periodic inspection should identify missing, idle, damaged or unrecorded assets.
Review the fixed asset register controls guide.
Component replacements
When a significant component is replaced, capitalise the new component and derecognise the carrying amount of the old component. The register must identify components clearly enough to support this accounting.
Lease and right-of-use assets
Right-of-use assets may be maintained in a separate subledger or asset class. Reconcile cost, depreciation, modifications and disposals to the related lease records and general ledger.
Assets held at multiple locations
Location transfers should update custody and operational records without changing total carrying amount. Unrecorded transfers can cause false missing-asset exceptions during physical verification.
Manual journal controls
Restrict direct postings to PPE cost and accumulated depreciation accounts. Require asset-account journals to reference an asset ID, project or approved reconciliation item.
Data migration
When changing systems, reconcile opening cost, depreciation, impairment and revaluation before go-live. Retain the conversion file and approval evidence.
Database and access controls
Protect asset master data, useful lives, residual values and disposal status. Changes should have approval, timestamps and audit trails.
Financial statement disclosure
IAS 16 note reconciliations should agree to the register and ledger. Movement schedules provide a third level of control between detailed assets and published totals.
See the financial statements guide.
General ledger connection
The general ledger is the reporting hub, while the register is a subledger. Review the computerised general ledger guide for interface and close controls.
Review responsibilities
Asset accounting, operations, procurement and finance may hold different evidence. Assign a preparer and independent reviewer, with clear escalation for unresolved items.
Ageing unreconciled differences
Maintain an ageing schedule for unresolved differences with owners and deadlines. Old differences should be escalated because they can indicate control failure or asset loss.
Common mistakes
- forcing the register to the ledger without investigation;
- relying on annual reconciliation only;
- allowing unrestricted PPE journals;
- ignoring construction in progress;
- treating numerical agreement as proof of existence;
- failing to reconcile revaluation and impairment;
- not documenting corrections.
Evidence retention
Retain asset invoices, approvals, disposal documents, valuation reports and reconciliation sign-offs according to legal and organisational retention requirements.
Review unresolved items before each reporting close.
Key takeaway
The fixed asset register and general ledger serve different purposes but must agree. Regular class-level reconciliation, physical verification and controlled journals protect both accounting accuracy and asset custody.
Official references: IAS 16 Property, Plant and Equipment, ACCA computerised accounting and the auditor, and ACCA internal controls.