General Policies:

Procedures and Policies for acquisition, transfer and disposal of fixed assets should
be established. Fixed Assets useful life should be clearly defined and be consistent
with groups fixed asset policies. Operating units may have different policies subject
to group finance department approval.
Fixed Assets Register
Each Operating units finance department must maintain a comprehensive and upto
date fixed assets register.
The register should include the following details :
Cost of Asset
Asset useful life or depreciation rate
Location and custodian rate
Current and accumulated depreciation rate
Net Book Value

As far as possible all tangible fixed assets should be promptly tagged to permit easy
identification.
Accuracy of the register should be verified through periodic physical fixed assets
counts and confirmation with custodians.
All adjustment in fixed asset register should be authorized by the finance
manager/accountant after sufficient investigation.
Land, Building and lease hold buildings should be revalued by independent
professional valuers once every ____ years
Fixed assets useful life should be reviewed every once in ___ years
There should be adequate insurance coverage policy for fixed assets

Fixed Assets Movements

All Fixed Assets movement should be approved in accordance with the authority
limits

Fixed assets transfer form must be completed and acknowledged by the receiving
department for all permanent transfer of fixed assets.
Fixed Assets Acquisition
Additions to fixed assets(including long term leases) should be approved in
accordance with the authority limits. For long term leases the total amount
committed should be used as the amount determining the level of approval
Fixed assets addition more than Rs 1000 should be capitalized. Additions below Rs
1000 should be written off an monitored separately.
For Acquisition of fixed assets less than Rs 10000, the relevant department should
refer to a pre selected list of suppliers whom have been reliably evaluated for
quality every ___ years
For Acquisition of fixed assets more than Rs 20000, three quotation should be
obtained.
For contracts costing more than Rs 500000, the open tender system should be
adopted with a minimum of three quotations
Any variation orders more than 10 % of the original approved contract should be
reapproved in accordance with the authority limit.
Fixed Asset Disposal
Fixed Asset Disposal should be authorized in accordance with the authorized limit
Reconciliation
Fixed Asset register should be reconciled to the GL on monthly basis.
Segregation of Duties
There should be a segregation of responsibilities between the following functions
Fixed Assets Custodian
Approving Authorities for Fixed Asset Movement
Maintenance of Fixed Assets Account
Fixed Assets Verification

Fixed Assets Count

Physical fixed assets at all location should be counted and checked against book
records at least once every two years
Difference between fixed assets counts and book records should be investigated
Thoroughly before adjustments are approved and made to the books. Results from
the investigation should be documentated and reported back to the head office.
Delegation of Authority
Appropriate delegation of authority guidelines For Fixed Assets management should
be documented.
The Document DOA should cover the authority to
Acquisitions, Transfer and Disposals
Fixed Asset write off.