Fixed Asset Register

What is a Fixed Asset Register?

A Fixed Asset Register (FAR) is the per-asset ledger that tracks every capitalised fixed asset a company owns — distinct from the General Ledger, which holds only aggregate balances per asset class. The register sits at the intersection of procurement, finance, and audit, and is the single source of truth that all three teams reconcile against.

Indian regulation does not prescribe a single statutory format, but four overlapping requirements drive what the register must contain:

Schedule II of the Companies Act 2013 — useful life and depreciation method per asset class
CARO 2020 Clause 3(i) — physical verification, title-deed status, revaluation, benami
IND AS 16 — component accounting, residual value, useful-life review, derecognition
Income Tax Act — block-of-asset depreciation for tax purposes (different from book depreciation)

Mandatory and recommended fields

The minimum fields the register must contain to satisfy Indian audit and statutory requirements:

Asset identification — unique asset ID, description, serial number / IMEI / MAC for IT, asset class (Schedule II)
Capitalisation — capitalisation date, original cost (net of GST input credit), components if applicable (IND AS 16)
Depreciation — useful life, residual value, method (SLM/WDV), accumulated depreciation, current WDV
Location and custodian — physical location, department / cost center, custodian name and ID, GPS coordinates (modern practice)
Procurement linkage — original PO number, GRN number, vendor master ID, invoice reference
Audit and compliance — last verification date, verification status, photograph, title deed reference for immovable property, AMC reference, insurance reference
Disposal — disposal status (active, retired, disposed, scrapped), disposal date, proceeds, gain/loss on disposal, IND AS 16 derecognition entry reference

Why the FAR is the most-audited document in your procurement-finance stack

Three reasons it lands at the centre of every audit:

Material balance-sheet impact — fixed assets are typically 30–60% of total assets for a manufacturer. Errors here move the needle on net worth, depreciation expense, and tax.
Cross-validates four other documents — PO, GRN, ledger, physical-verification report. If any two don\'t reconcile, the auditor finds it.
The hardest record to reconstruct — once an asset disappears from the register without proper disposal, getting it back in is a manual archaeology project across PO archives, vendor records, and physical sightings.

Common register failures in Indian companies

Excel-only register — version control failures, no audit trail, tab-deletion accidents, no reconciliation to GL
Asset class mis-mapping — assets capitalised under wrong Schedule II class → wrong useful life for the entire life
No component accounting — a building, its lifts, its HVAC, and its fit-out all depreciated as a single line under Schedule II — IND AS 16 audit qualification
Stale custodian / location — never updated after employee transfers, office relocations, or M&A integrations
Disposal recorded in operations but not in register — asset still on books years after physical retirement
No linkage to PO / GRN — when an auditor asks "where did this asset come from", reconstruction takes weeks
Income Tax depreciation rates mistakenly used for book depreciation — Companies Act and IT Act are different regimes

How TRAXX maintains the FAR

Asset records auto-created from GRN — capitalisation values, useful life, method pre-filled per Schedule II
Component accounting at the asset record level — single PO can split into multiple components with distinct lives
Live linkage to PO, GRN, vendor master, and depreciation engine — no manual reconciliation between systems
Mobile VTR audit feeds verification status back into the register continuously
Disposal workflow auto-derecognises the asset and posts the gain/loss entry per IND AS 16
Auditor-ready exports in CARO 2020 format, IND AS 16 disclosures, and Income Tax Act block-of-asset format

FAQs

Is the Fixed Asset Register format prescribed by law? +

There is no single statutory format, but the register must contain enough fields to satisfy four overlapping requirements: Schedule II depreciation calculations, CARO 2020 Clause 3(i) audit, IND AS 16 recognition / derecognition, and Income Tax Act block-of-asset reporting. Most companies' formats end up looking similar because of this overlap.

What are the mandatory fields in a Fixed Asset Register? +

At minimum: asset ID, description, asset class, capitalisation date, original cost, location, custodian, useful life, depreciation method, accumulated depreciation, written-down value, and disposal status. Beyond that: PO reference, GRN reference, vendor, serial number, IMEI/MAC for IT, photograph, GPS, AMC details, and insurance reference are common.

How often should the register be reconciled to physical assets? +

Statutory auditors expect at least annual physical verification across material asset classes (CARO 2020 Clause 3(i)(b)). Best practice: continuous rolling verification using a methodology like VTR (Verify, Tag & Reconcile), with all classes touched at least once a year and high-value classes more often.

What's the difference between a Fixed Asset Register and a General Ledger? +

The General Ledger holds aggregate financial values (total cost, accumulated depreciation) per asset class. The Fixed Asset Register holds per-asset records — individual serial numbers, locations, custodians, photos. The two must reconcile: register total = GL balance for that class. Discrepancies are an audit qualification.

Can the register be in Excel or do we need software? +

Excel works for very small companies (≤ 100 assets, single location, no auditor scrutiny). Beyond that, the reconciliation pain, audit trail loss, and version-control failures make Excel costly. A purpose-built register is one part of a procurement-asset platform; the value comes from the live linkage to PO, GRN, depreciation engine, and disposal records.

Last updated: 2026-04-29