Inventory at the enterprise: the procedure for registration

Fixed assets (FA) are tangible assets that an enterprise holds for use in production, supply of goods, provision of services, rental, or for administrative purposes. They have an expected useful life of more than one year.

Why conduct an inventory of fixed assets?

Inventory of fixed assets is necessary for:

• Checking the actual availability of assets
• Identifying obsolete or unused fixed assets
• Checking the correctness of accounting
• Identifying discrepancies between actual data and accounting records
• Assessing the technical condition of fixed assets

How often should inventory be taken?

• Mandatory once a year before preparing the annual financial statements
• When changing financially responsible persons
• In case of theft, abuse or damage to valuables
• When reorganizing or liquidating an enterprise

Who carries out the inventory?

The inventory is carried out by an inventory commission created by order of the enterprise manager. The commission usually includes:

• Representatives of the enterprise management
• Accounting staff
• Specialists understand the technical characteristics of the OS
• Materially responsible persons (but not as members of the commission)

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Inventory of fixed assets: step-by-step instructions

Inventorying fixed assets (FA) is an important procedure to ensure the reliability of accounting. Here's how to do it effectively:

Preparing for inventory:

• Create an inventory committee by order of the manager
• Prepare up-to-date data on fixed assets for accounting
• Provide the committee with the necessary tools (tape measures, scales, etc.)

Conducting an inventory:

• Check the actual availability of each fixed asset
• Check inventory numbers
• Check the technical condition of the assets
• Identify unused or obsolete fixed assets

Documenting:

• Fill in inventory descriptions (Form No. inv-1)
• Compile comparative information (Form No. inv-18)
• If discrepancies are found, draw up an inventory report (Form No. inv-24)

Displaying results:

• Record excess fixed assets at fair value
• Write off deficiencies at residual value
• Reflect the results in accounting and tax records

To effectively account for fixed assets, conduct inventory regularly (at least annually), implement automated accounting systems, and ensure that staff are properly trained in the procedures..

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Typical errors in FA inventory

1. Incomplete coverage of objects - failure to account for low-value non-current tangible assets, leased fixed assets or those located outside the enterprise.
2. Incorrect assessment of technical condition - superficial check of equipment operability, ignoring signs of obsolescence.
3. Errors in documentary execution - lack of signatures of all commission members and financially responsible persons, incorrect reflection of identified discrepancies in comparative information.
4. Failure to comply with the inventory procedure - conducting an inventory without the presence of financially responsible persons, lack of control checks of the correctness of the inventory, ignoring the need to obtain written explanations from financially responsible persons when discrepancies are identified.
5. Incorrect classification of fixed assets - classifying objects that do not meet the recognition criteria as fixed assets, incorrect definition of the fixed asset group, affecting the depreciation calculation method.
6. Ignoring changes in the composition of fixed assets - failure to account for upgrades or reconstructions, omitting objects that were acquired shortly before the inventory.

Avoiding these mistakes will help ensure the accuracy and effectiveness of your asset inventory.

Accounting for fixed assets requires deep knowledge, attention to detail and constant monitoring of changes in legislation. Don't waste valuable time on routine operations - trust it to professionals. Our team of experienced accountants will ensure accurate accounting of your assets, optimize the tax burden and help avoid errors.

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