Physical Verification of Assets
Introduction
Physical verification of assets is a critical process to ensure that an entity's assets exist and align with recorded financial statements. This process is vital for businesses at the end of each financial year to verify the accuracy of asset records and to comply with statutory requirements. At TAXASTRO ADVISORS, we provide comprehensive asset verification services that ensure compliance, accuracy, and transparency in asset management.
Objective of Asset Verification
- Statutory Compliance: Meets the requirements under CARO 2016.
- Asset Existence: Verifies the physical presence of recorded assets.
- Valuation and Rectification: Identifies and rectifies any accounting discrepancies.
- Internal Compliance: Supports internal control mechanisms.
- Customer Service Continuity: Ensures smooth ongoing operations.
Our Approach to Asset Verification
- Comprehensive Reconciliation: We conduct a detailed line-by-line reconciliation of the fixed asset accounting records with the actual assets identified during physical inventory taking.
- Technology-Driven Process: Automated comparison of asset tags, serial numbers, and manufacturer model numbers. Manual checks on additional details such as descriptions, locations, and departments.
- Bulk Asset Allocation: Bulk entries and grouped assets (e.g., computers, equipment) are accurately allocated to individual assets.
- Follow-Up and Documentation: Our team makes follow-up visits to verify residual assets and gather additional information where necessary.
- Audit Trail Creation: We provide a comprehensive audit trail linking the reconciled inventory to the fixed asset records, ensuring traceability.
Deliverables
- Audit Trail: A detailed Excel spreadsheet linking the verified assets with accounting records.
- Reconciliation Reports: Reports identifying matched assets, unrecorded additions, and retirements.
- Executive Summary: Signed off by technical, SCM, finance, and MAS teams, summarizing findings.
Our Services Include
- Consolidation of physical reports for all sites and assets/inventories.
- Reconciliation between physical counts and book records.
- Identification of discrepancies and analysis of the reasons behind differences.
- Delivery of a Physical Verification Report detailing the entire process.
At TAXASTRO ADVISORS, we provide accurate and efficient asset verification services to ensure compliance and safeguard your business's financial integrity. Our expert team is equipped to handle asset verification both in India and internationally, with local teams available for remote areas.
Benefits of Professional Asset Verification
- Regulatory Compliance: Meet statutory requirements and avoid penalties
- Financial Accuracy: Ensure balance sheets accurately reflect existing assets
- Asset Protection: Identify missing or misappropriated assets
- Improved Asset Management: Make informed decisions about asset maintenance and replacement
- Insurance Optimization: Ensure adequate coverage without overpaying for non-existent assets
Industries We Serve
- Manufacturing: Verification of plant and machinery, production equipment, and tools
- Information Technology: Servers, computers, networking equipment, and software licenses
- Healthcare: Medical devices, equipment, and specialized healthcare assets
- Education: Laboratory equipment, computers, furniture, and educational materials
- Retail: Store fixtures, inventory management systems, and point-of-sale equipment
- Hospitality: Furniture, fixtures, and equipment for hotels and restaurants
Frequently Asked Questions
How often should physical verification of assets be conducted?
While statutory requirements mandate annual verification at the end of the financial year, we recommend quarterly or bi-annual verifications for businesses with large asset bases or high-value assets to ensure better control and management.
What types of assets require physical verification?
All tangible fixed assets including plant and machinery, furniture and fixtures, office equipment, computers, vehicles, and other physical assets that appear on the company's balance sheet should be verified. We also recommend verification of certain intangible assets where possible, such as software licenses.
How long does the asset verification process take?
The duration depends on the size of your business, number of locations, and quantity of assets. Small to medium businesses typically require 1-2 weeks, while larger organizations with multiple locations may need 3-4 weeks or more. Our team works efficiently to minimize disruption to your operations.
Can you handle asset verification across multiple locations?
Yes, TAXASTRO ADVISORS has the capability to conduct asset verification across multiple locations both within India and internationally. We coordinate teams to ensure consistent methodology and reporting across all sites.
How do you handle discrepancies found during verification?
When discrepancies are identified, we document them in detail and work with your team to investigate the causes. We provide recommendations for rectification in accounting records and suggest improvements to asset management processes to prevent future discrepancies.
Contact Us
Let TAXASTRO ADVISORS ensure the accuracy and compliance of your asset records. Contact us today for professional asset verification services tailored to your business needs.
