Compilation and Maintenance of Fixed Asset Register in Dubai, Abu Dhabi & UAE

What is a Fixed Asset Register?

A fixed asset register is a detailed listing of fixed assets owned by an organization. This register is mostly prepared and used to keep track of the book value of the assets, predominantly for accounting and taxation purposes.

Significant resources get invested in fixed assets, be it buildings, plant and equipment, Information Technology hardware or office interiors. Examination and confirmation that the assets physically exist, have not been impaired, and still continue to perform their intended functions forms an integral part of an entity’s accounting for its assets.

Creating and maintaining a fixed asset register, and periodic physical verification of fixed assets become a critical function especially for asset-intensive entities. Failure to do this can lead to either overestimation or otherwise of the company’s assets in its balance sheet. Physical verification also becomes crucial when external auditors need some assurance that the assets included in the balance sheet do exist and an independent confirmation can assist in providing such assurance.

PKF UAE assists its clients in creation and regular maintenance of the fixed asset register. We also undertake physical verification exercises for the existing assets, along with classifying them under various categories for an easier identification and reconciliation of their values with the balance sheet. We also provide assistance in their coding for seamless integration in accounting records. Contact PKF UAE if you would like to get your physical assets tagged, reconciled and a detailed fixed asset register compiled.

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Frequently asked questions on fixed asset verification, tagging and registry creation

1. Our auditor has included a comment in the audit report citing inadequate control on fixed assets and the fixed asset register being out of date. Can PKF assist?

Certainly. PKF can assist in many ways depending on your requirements and the status of the fixed asset function. We can create a fixed asset register from scratch, update it if it has been out of date, physically count and tag the fixed assets with a bar code including taking their pictures and capturing the serial number (if available), insert values against the assets if supporting invoices are available, etc. The service can be tailored and customised as per your requirements.

2. Our auditor has not made any adverse comment in the audit report. Why should I create a fixed asset register and get the physical assets tagged?

Control over the fixed assets of an entity is critical. A loss of a vital asset can impair the operations of an entity. If assets are not controlled and monitored, they are likely to be stolen, expensive assets can be replaced with cheaper assets by unscrupulous employees and their loss will not be noticed. Missing or non-existing assets also inflate the balance sheet of a company. All of these can be partly controlled by tagging the assets and creating and maintaining a fixed asset register.

3. If retained to create or update the fixed asset register, what is the format of the report that will be generated and what will the report include?

PKF uses a fixed asset tracking software to count and tag the fixed assets. If the client wants to continue to subscribe to the software (post PKF’s assignment) all the details captured during the exercise will be available. If not, we will extract the data in MS Excel and submit the report. The report will include the unique asset number, description of the asset, category, its location and sublocation, custodian of the asset, serial number (if applicable), image, cost or value (if shared with us), whether leased or owned, in use or idle and other such details. This can be customised to some extent.

4. What kind of labels are used to tag the assets and are they expensive?

Resin labels are used for assets which are indoors and are not exposed to heat, moisture, and external elements. We use aluminium labels for assets which are exposed to the above. Aluminium labels cost between AED 7-15 per piece depending on size and inscription but can be lower depending on numbers ordered. PKF will introduce the client to an independent vendor. PKF has no role in this regard.

5. Is there a minimum number of assets before I can request for tagging of assets and creating a fixed asset register?

Not necessarily. However, if the number of assets is not significant, the fixed asset register will not be too material for any stakeholder and hence would make limited sense. However, we can create or update the register, tag the assets, and submit a report for any number of assets. Please contact us and we will be pleased to be of assistance.

6. What are the categories of assets which can be covered under the exercise and the assets which are generally excluded?

Most assets lend themselves to an accurate count and recording. These include furniture and fixtures (critical for hotels, furnished apartments and large corporate offices), office equipment, IT assets including computers, servers, switches, firewalls, kitchen equipment, manufacturing assets, decorative assets like paintings, artefacts, security equipment like cameras, scanners etc. Assets which are generally excluded from counting and labelling are assets such as intricate pipeline in a factory or refining plant, assets with very low values such as hand held calculators, blinds in rooms, kettles and similar equipment in pantry, soft assets like curtains and carpets and leasehold improvement such as partitions, built-in cabinets, etc.

7. Do I have to invest in any software, hardware or incur any ongoing expense?

We use an online software to create a fixed asset register, generate a bar code label, tag the assets, and generate a fixed register with the necessary details which we can export to Excel and furnish it for your records. If you plan to keep updating your records in Excel without generating a bar code label, no investment in software or hardware is required. However, if you plan to continue to tag assets that you may procure in the future, the software may be a good tool. It is subscription based and no upfront payment is necessary. You pay a monthly subscription for a fixed number of assets. We can introduce you to the vendor, who owns and operates the software. A bar code printer may be necessary along with labels to print the bar code labels from the software.

8. I have an updated fixed asset register, but the values have not been incorporated in the accounting software to enable calculation of depreciation. Can you assist with data entry of cost/value against the assets?

Indeed. If you have documents that indicate the value of the assets such as a supplier’s invoice, or a contractor’s agreement or any such external/internal document, the cost/value can be inserted against the identified assets. The date of purchase and other relevant details can also be inserted. In case the original estimate or invoice is not available, please discuss with the auditors if they agree to valuing the assets on a replacement basis. On completion of the exercise the fixed asset register will be complete with the values against the specific assets and which will form basis for calculation of depreciation.

9. How long does it take for an asset tagging and registry creation exercise to be completed?

This is dependent on the number of assets, our scope of work, the level of details to be captured, kind of assets and other such factors. However, as a benchmark it takes between 3-5 minutes per asset to capture the details(including an image and serial number), undertake data entry, print and affix the label(slightly longer if it is an aluminium label) and reconciliation. Hence a team working as a pair can expect to complete between 100 to 160 assets in a day. Assuming an entity has 10,000 assets and if PKF deputes a team of six persons to the assignment, the exercise can be completed in 20-30 working days assuming some preparation has been undertaken in advance. This time is an estimate and can vary based on many factors.

10. What is the cost of creating a fixed asset register, including physical verification, and attaching a bar code label?

The cost is dependent on many factors such as number of assets, the spread of the assets at multiple locations, type of assets, whether an image and serial number of an asset must be captured, if custodian details of the assets are to be inserted, if there are many sub-locations within a main location, if there are many assets with a parent-child relationship, if any assistance will be available from the company to stick labels at difficult to reach places and other such factors. However, the cost of physically verifying and tagging a fixed asset can be as low as AED 3 or 4 (excluding cost of a metal label) to AED 8 per asset depending on the scope of work. If the exact number of assets are known and communicated to PKF, a fixed fee can also be quoted. Please discuss this with us and we will be pleased to offer a fair and considered quote.

11. What support will PKF need from the client for the asset tagging and register creation exercise?

PKF will undertake a reconnaissance of the all the locations where the assets are based. The client must facilitate this. If the location is in a sensitive place, visitors passes must be arranged for PKF staff. PKF staff will also require Wi-fi and connection to the Internet (must be communicated to PKF if client is unable to provide this). If there are assets which are technical in nature, PKF will require someone with a technical background to accurately describe such assets so that the correct details can be captured. For difficult-toreach assets, PKF will need assistance from the client to affix labels to such assets. Client must ensure that there is minimum movement of assets during the exercise. In the case of a hotel or a furnished apartment client must coordinate with PKF to ensure that guest rooms are available for asset verification. If values are to be inserted, source documents must be made available to PKF. Support on other matters may be required on a case to case basis.

12. Is PKF able to cover assets based in all the emirates of the UAE?

Yes, we can undertake the exercise in one or all emirates of the UAE.

13. How much time does PKF need to set up and commence the tagging exercise?

That is dependent on the number and kind of assets, location of the assets, PKF’s scope of work, ready availability of information from the client and other such factors. The set-up time is unlikely to exceed 7 working days.

14. Can PKF procure the printers, bar codes, aluminium labels and bar code readers for the assignment, charge for it and hand them over to the client on the conclusion of the assignment?

Yes, PKF can procure at your cost the above so you have a seamless experience all through the exercise with little or no effort. We aim to please..!!

15. Are you able to provide references from your existing clients before availing the fixed asset verification and tagging service?

Nothing will please us more. We will share the contact details or two or more clients to ascertain the quality, timeliness, and the professionalism of our services.

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