How to do physical verification of fixed assets ?

Physical verification of fixed assets is the systematic process of confirming that every asset recorded in the fixed asset register truly exists, is in the correct location, and matches the condition and details in the books. It ensures accurate financial reporting, audit readiness, compliance, and control over valuable resources. Here is how to do physical verification of fixed assets:

• Define the scope (which assets and locations), schedule the verification, and assign roles. 

• Update the fixed asset register and reconcile it with purchase records to eliminate obvious errors.

• Gather documents like invoices, disposal records, and prior audit reports. 

• Decide on verification methods (wall-to-wall) based on the record completeness.

• Ensure each asset has a unique identifier such as a barcode, QR code or RFID tag. 

• Teams physically visit each location and verify the existence, location, and condition of assets against the register. 

• Use mobile scanners or apps to read tags and record results. Log any discrepancy, such as missing, extra, relocated, or unrecorded assets. Confirm that the asset is assignable to the correct department and user.

• After on-site verification, compare physical findings with the asset register. Investigate inconsistencies. Missing assets may be disposed of or transferred without update, while unrecorded items should be added to the register. 

• Check documentation for evidence and rectify errors.

• Update the fixed asset register with verified details: correct locations, conditions, additions, disposals, and adjustments. 

• Finally, prepare a formal verification report summarising scope, methods, discrepancies, resolutions, and recommendations to strengthen future audits.

Hope you understood how you can do physical verification of fixed assets.

Hey there friend,

I see you have a question about physical verification of fixed assets. Verification and understanding the market value of one’s property ensures that the asset is well protected. A family member shared with me the meaning and its advantages. Keep reading to know more.

To conduct verification of fixed assets including examination, you will need to look at related records and physical verification. The auditor will have to verify the records with reference to the documentary evidence. It is usually conducted by the management.

Usually, physical verification of fixed assets is conducted once every three years. It aims at providing information to all stakeholders whether financial statements provide a true and fair picture.There is a small audit fee that is paid for the process to be completed.

Take a look below to read physical verification of fixed assets report format India :

Format of the offer 

1. Name of the Audit Firm /Consortium Firm :

2. Address

: : : : : : : :

Permanent Address Correspondence Address Telephone Number

Fax Number

Email Address

PAN Number

Service Tax Regd. No.

Particulars

Year of establishment & registration of Firm(s)

Average Annual Turnover of the firm in the preceding 3 Financial Years

Number of partners in the firm

Types of Audit conducted in State/ Central power sector PSUs.

Types of Audit conducted in other State/Central PSUs.

The address of the office / branch near to HQ of OHPC & nearby power stations. Date of Partnership deed with Registration Number.

Copy of consortium agreement

Annexure -2

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