Inventory of Fixed Assets

Fixed assets inventory is a verification of a company’s long-term assets that allows for the reconciliation of accounting data with the actual state of the property complex. For an enterprise, this is a vital element of control because fixed assets form the material basis of the business: they are what ensure production, administrative, transport, and infrastructure processes.

When information on fixed assets is not updated, distortions gradually accumulate in the accounting: objects change location, are modernized, taken out of service, written off, or continue to be listed in the system without actual use. As a result, the company loses data accuracy, and along with it, the quality of managerial and financial decisions.

Why a company should update data on fixed assets

Fixed asset inventory is necessary not only for maintaining accounting discipline. It helps to see how closely the asset structure actually matches the data in the documents and how effectively the company manages its property complex.

The verification allows to:

• confirm the presence of fixed asset objects;
• establish their actual location;
• check the condition of assets;
• identify surpluses, shortages, and accounting errors;
• clarify data for reappraisal or audit;
• obtain a basis for decisions on repair, modernization, or write-off.

Which assets are usually included in the verification

The composition of fixed assets depends on the specifics of the business. For one enterprise, buildings and engineering infrastructure play a key role, while for another, it is transport, production lines, or warehouse machinery.

Inventory may cover:

• buildings and structures;
• machinery and equipment;
• vehicles;
• warehouse and loading machinery;
• engineering networks and auxiliary facilities;
• office and administrative assets;
• other objects classified as company fixed assets.

When fixed asset inventory is especially necessary

There are a number of situations when updating fixed asset data becomes particularly important. At such moments, a company needs to rely on accurate physical information rather than formal balances in the system.

Verification is especially in demand:

• before a property reappraisal;
• when there is a change in owners or the composition of founders;
• before an audit;
• when preparing for a tax inspection;
• during a business reorganization process;
• when pledging assets as collateral or preparing for financing;
• when it is necessary to check the condition of large property blocks.

How inventory results are used

The practical value of fixed asset inventory lies in the fact that it allows the obtained data to be used in several directions at once.

After the verification, the company receives a more reliable base for working with its property complex. This is especially important in organizations where fixed assets are distributed across several sites, branches, or production zones, and where some assets are operated in an intensive mode. Under such conditions, even small accounting inaccuracies grow into a systemic problem over time: they hinder repair planning, complicate reappraisal, and reduce the reliability of internal reporting.

Furthermore, inventory allows for the identification of objects that have effectively lost their economic value or, conversely, are being used more actively than assumed by the documents. For a business, this means the ability to take a more rational approach to updating fixed assets, timely reviewing the asset structure, and maintaining an up-to-date picture of the property complex without accumulating outdated data in the accounting.

The results of the check can serve as a basis for:

• adjusting accounting records;
• clarifying the composition of the property complex;
• planning repairs and asset replacements;
• preparing documents for an audit or inspection;
• making decisions on modernization and write-offs;
• assessing the efficiency of fixed asset utilization.

Fixed assets inventory from GPC “Doerfer”

GPC “Doerfer” conducts fixed asset inventory taking into account the scale of the business, the structure of assets, and the client’s goals. We help obtain objective data on the company’s property complex so that the client can update their records, reduce the risk of errors, and make asset decisions based on the actual state of affairs.