The Fixed Asset schedule is a special type of sub-schedule that details all the assets owned by a company. Unlike prepaid or deferred schedules, a fixed asset schedule requires much more detail. Fixed assets are treated unlike any other balance sheet account. The costs of the assets stay on the company’s balance sheet until they are either disposed of or sold. They are expensed by either depreciating or amortizing the costs, which has been explained in an earlier blog post by Andrea Steinbrenner, and the assets are reported as a net amount. However, it is very important to track each individual asset and the related depreciation.
As a rule of best practices, each asset that is capitalized should have some sort of unique identifier, such as a numerical tag. This is how you itemize your fixed asset schedule, by asset number. You also need to separate your assets into categories, as they are depreciated at different rates. Computers are depreciated differently than furniture which is depreciated differently than vehicles or equipment. Once separated, itemize each asset in each category. For each asset, you need to detail certain information including: 1) the purchase date, 2) the purchase price, 3) monthly depreciation amount, and 4) accumulated depreciation. Once you itemize each asset category, you want to total the asset values and accumulated depreciation to make sure they tie to your balance sheet.
Not only is a detailed asset schedule important for reconciling your balance sheet, having one makes it that much easier and quicker for your CPA to prepare year end taxes. As more details you have about all your fixed assets emerges, the easier accounting becomes. It also means there is less puzzle work when it comes time to sell assets or prepare taxes.Written by: Ashley Peth TGG Accounting