Fixed Asset Audit & Verification

Fixed asset audit and verification is the systematic process of physically identifying, tagging, and reconciling property, plant, and equipment with the fixed asset register and books of account. It safeguards capital-intensive investments and supports accurate financial reporting.

With assets often spread across plants, branches, sites, and vehicles, organisations face common issues — missing assets, untagged equipment, incorrect capitalisation, wrong depreciation, and gaps in the fixed asset register that distort financials and tax computations.

We provide end-to-end fixed asset audit and verification services covering physical verification, tagging, register reconstruction, depreciation review, impairment assessment, and componentisation under Ind AS — bringing complete visibility and control over your asset base.

Our Fixed Asset Audit & Verification Services

Physical Verification

On-site identification, counting, and condition assessment of land, buildings, plant, machinery, IT, furniture, and vehicles.

Asset Tagging & Coding

Unique tagging using barcode, QR, or RFID tags with linked digital records for traceability and future audits.

Fixed Asset Register

Creation or reconstruction of fixed asset register with detailed asset attributes, location, custodian, and useful life.

FAR vs Books Reconciliation

Reconciliation of physical assets, fixed asset register, general ledger, and CWIP to identify and adjust differences.

Depreciation & Useful Life Review

Review of depreciation rates, methods, and useful lives as per Schedule II, Income Tax Act, and Ind AS / AS.

Componentisation under Ind AS

Identification and accounting of significant components with different useful lives as required under Ind AS 16.

Impairment & Disposal Review

Identification of idle, obsolete, or damaged assets, impairment indicators, and assistance with disposal accounting.

Capitalisation & CWIP Audit

Review of capital expenditure, capitalisation policy, borrowing costs, and ageing of capital work-in-progress.

Our Audit Process

Scoping & Data Collection

Understanding asset categories, locations, FAR, and capitalisation policy for each business unit.

Physical Verification

Site-wise verification, photography, condition check, and capture of asset attributes.

Tagging & Numbering

Affixing barcode / QR tags, recording unique IDs, and linking with digital fixed asset register.

Reconciliation & Adjustments

Matching with FAR and books, identifying not found, untagged, and unrecorded assets.

Reporting & Recommendations

Audit report with findings, depreciation review, impairment indicators, and improvement plan.

Why Fixed Asset Audit Matters

✓ Confirms existence and location of assets

✓ Builds an accurate, auditable fixed asset register

✓ Validates depreciation and useful life assumptions

✓ Supports Schedule II and Ind AS compliance

✓ Highlights idle, obsolete, and missing assets

✓ Improves insurance cover and claim readiness

✓ Strengthens internal controls and accountability

✓ Enables better capex planning and decisions

FAQs on Fixed Asset Audit & Verification

What is fixed asset audit and verification?

It is an independent process of physically verifying property, plant, and equipment of an organisation, tagging them with unique identifiers, and reconciling the physical findings with the fixed asset register and books of account. It also covers review of depreciation, useful life, and impairment.

How often should fixed assets be physically verified?

Most organisations conduct a comprehensive physical verification annually or once every two to three years on a rotational basis. High-value or movable assets such as IT equipment and tools are often verified more frequently to control loss and pilferage.

What is a fixed asset register?

A fixed asset register is a detailed record of all capitalised assets owned or controlled by an organisation. It typically captures asset description, unique tag, category, location, custodian, date of purchase, cost, depreciation, accumulated depreciation, written down value, and disposal details.

How is depreciation reviewed during the audit?

Auditors review the depreciation method, rates, and useful lives applied for each class of asset against Schedule II of the Companies Act, Ind AS / AS guidance, and tax rules. They also check componentisation, residual values, and consistency with prior periods.

What happens to assets that are not found during verification?

Not-found assets are first investigated to rule out movement, transfer, or pending updates. Where genuinely missing, the WDV is written off in the books with appropriate management approval, insurance follow-up, and disclosure. Recurring losses point to control gaps that need remediation.

What is componentisation under Ind AS 16?

Under Ind AS 16, significant parts of a fixed asset that have different useful lives must be depreciated separately. For example, the engine and body of an aircraft, or major modules of plant and machinery, may be treated as separate components for depreciation purposes.

Is asset tagging mandatory?

Asset tagging is not specifically mandated by law, but it is considered a best practice and is generally expected by statutory and internal auditors. Tagging through barcode, QR, or RFID enables quick identification, easier reconciliation, and stronger internal controls over fixed assets.

Take Full Control of Your Fixed Assets

Partner with our experts to physically verify, tag, and accurately account for every asset on your books.

Talk to a Fixed Asset Auditor