What are gross fixed assets

what are gross fixed assets

What is a fixed asset schedule?

A fixed asset schedule is the complete listing of all fixed assets that comprise the fixed asset balances listed in the general ledger. This schedule states the following information for each fixed asset listed:

1. Unique asset number

2. Fixed asset description

3. Gross cost

4. Accumulated depreciation

5. Net cost

A more detailed fixed asset schedule may also state the salvage value assumption (if any) for each fixed asset, as well as the annual depreciation ascribed to each asset, shown separately by year. The type of depreciation method may also be listed. The listing can also include any impairment charges against an asset.

The cumulative total of all the gross cost amounts in the report should equal the balance in the general ledger account for fixed assets. If the fixed assets in the general ledger are separately recorded by type (such as for furniture & fixtures, or for machinery), the fixed asset schedule

should be similarly organized, with subtotals that trace back to these account balances.

The cumulative total of all accumulated depreciation in the report should equal the balance in the general ledger account for accumulated depreciation.

The fixed asset schedule is routinely used by a company's auditors to verify the existence of fixed assets, and to trace these items back to the general ledger balance. As such, it is of considerable importance for the accounting staff to keep the schedule up-to-date.

The amount of work required to maintain the fixed asset schedule can be reduced with the following techniques:

  • Set a high capitalization limit, so that fewer expenditures are classified as fixed assets.
  • Eliminate assets from the list as soon as they are sold or otherwise disposed of, in order to reduce the size of the list.
  • Use several sub-categories of fixed assets within the schedule, so there are fewer assets within each category to reconcile.

Related Topics

Source: www.accountingtools.com

Category: Bank

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