The importance of maintaining an accurate fixed asset register is sometimes overlooked by small business, keeping a up to date and accurate fixed asset register doesn’t only assist with ensuring compliance is correctly reported it can play a very valuable role in assisting businesses with short and long term planning.

In our experience most small business owners don’t review or spare a thought for the assets being listed in their asset registers and just leave it to their accountants to ensure that they are compliant for tax, however, a asset register can be useful for more than ensuring compliance records are maintained.

Assets are fundamentally what business use to derive income, meet debt, retain customers/clients and grow wealth. Fixed assets include land, buildings, machines, office equipment and furnishings etc, and effective and efficient fixed asset management will contribute to the ongoing success of any business.

A fixed asset register is a item listing of all fixed assets owned by the business which can include details such as what the assets is, where it is located, purchase price and date, useful life of the asset within the business and expect value at the end of its useful life and is used to summarise both accounting and deductible taxation depreciation expense.

The benefits of maintaining an accurate and up to date asset register broadly including –

  • Calculation of annual depreciation
  • Forecasting profits and cash flow regarding maintenance of assets, upgrading assets and replacement of assets
  • It order to obtain finance or at least the most finance possible to grow your business, financiers will generally require an up to date assets register
  •  Used as a tool to stay on top of and try to prevent theft of assets
  • Succession/business exit planning and determining your business true value

Rarely will business owners be able to list every fixed asset they hold and there written down value especially the small ones, nor is there a need too, provided a fixed asset register is maintained. We encourage our clients to review their fixed asset registers as a minimum on an annual basis’ to ensure they are reporting their assets accurately, maximising their deductions as far as obsolete or scrapped assets and maximising their business valuation.


DISCLAIMER: The above information is general in nature, and must be tailored to your personal circumstances. The information is provided as a guide only.

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