What Is a Fixed Asset Register? Everything to Know

Imagine your business gets unexpectedly hit with an IRS audit. You’re feeling confident that all your expenses are accurate until the auditor starts asking questions about your company’s fixed asset register. Suddenly, you realize some machinery hasn’t been depreciated properly. A vehicle listed as active in your books was sold last year and no one seems to know what happened to one $30,000 piece of machinery. What started as a routine audit now poses a risk of serious penalties, compliance issues and a major hit to your credibility.

This scenario isn’t uncommon. Many businesses, especially those growing quickly, struggle to maintain accurate records of their high-value assets. Spreadsheets become outdated, maintenance records are scattered and no one is sure of what items listed on the books are fully accurate. And once tax season, audits or insurance claims pop up (and they will), these inconsistencies will cost your business far more than time.

That’s why a fixed asset register is so important. It’s the process of systematically recording physical assets throughout their lifecycle from purchase to disposal. This accounting technique will help you gain a broader understanding of your assets, ensure compliance standards are met and enhance operational efficiency. Follow along for a breakdown of what a fixed asset register is, why it matters and how to do it right.

What Is a Fixed Asset Register?

A fixed asset register is a centralized recording method used by businesses to track, monitor and manage their high-value assets such as buildings, machinery and vehicles in the long-term. Companies use this technique to ensure that all important assets are correctly accounted for throughout their lifecycle, from procurement to disposal.

For example, suppose a manufacturing facility discovered it had more than $200,000 worth of machinery listed in their books that had already been discarded. If the organization had effectively maintained a fixed asset register, these discarded assets would have been properly recorded in their books, and the company could have avoided tax errors and freed up capital.

Fixed Asset Register vs. Asset Inventory

Both a fixed asset register and an asset inventory track physical assets, but they accomplish different goals. A fixed asset register prioritizes long-term, high-value items that are typically capitalized and depreciated over time like buildings and machinery.

An asset inventory, on the other hand, includes a broader range of items like raw materials, finished goods, spare parts and office supplies. This type of inventory tends to be more fluid and changes frequently depending on current production cycles, sales and usage.

While these two accounting processes have some things in common like expensive IT equipment being listed in both cases, the key distinction lies in permanence and value. Fixed asset registers prioritize control and accountability for assets that have the most serious impact on the business’ financial health.

Benefits of Keeping a Fixed Asset Register

A properly maintained fixed asset register provides an array of operational and financial advantages, including: 

• Operational efficiency: Understanding exactly which assets exist and where they are located allows businesses to mitigate the risk of equipment downtime, avoid duplicate purchases and maximize equipment utilization.
• Financial management: Tracking assets helps with calculating depreciation, managing insurance coverage and supporting budgeting decisions with accurate and real-time data.
• Regulatory compliance: Fixed asset records are typically required for tax filings, audits and compliance with legal standards like IFRS or GAAP. Failure to keep accurate records can result in penalties or financial misstatements.

Overall, a fixed asset register will provide your organization with enhanced transparency and control over all of the most valuable items on your balance sheet.

Examples of Fixed Assets

Fixed assets are tangible resources that a business uses over the long term. Common examples include:

• Company vehicles: Your fleet used for business travel, deliveries other or field operations
• Office equipment and furniture: Typical office assets like desks, computers and printers used in day-to-day operations
• Manufacturing machinery: Maintenance tools and machines that help produce goods
• Buildings and land: Real estate assets owned and used by the business
• Other heavy equipment: Forklifts, generators or large-scale construction equipment used in industrial settings

These assets are typically integral to sustaining business operations and therefore not sold in the normal course of business.

What to Include in a Fixed Asset Register

To be effective, a fixed asset register should contain detailed information across several categories:

• Asset Information
  • Name, serial number and barcode
  • Physical location of the asset
• Financial Information
  • Purchase cost and date of acquisition
  • Current book value and depreciation
  • History of repair or upgrade costs
• Performance Information
  • Date of installation and warranty terms
  • Usage metrics, maintenance schedules and downtime records

Recording this comprehensive data allows organizations to have better asset management, valuation and audit readiness.

How to Track Assets the Right Way

Modern businesses can leverage various technologies to track their high-value fixed assets:

• Scannable barcodes: Attach these to physical assets for an easy means to quick identification and updates.
• GPS: Track mobile assets like vehicles and machinery while they are on the go.
• Radio frequency identification (RFID): Scan multiple items at once without direct line of sight.
• Bluetooth low energy (BLE): Used for tracking indoor equipment like office assets or medical devices without significant power usage.

The right approach for you depends on the size of your operation, assets you own and required tracking precision.

How a CMMS Can Help With Asset Tracking

Using a computerized maintenance management system (CMMS) like Coast simplifies the process of tracking your assets and their real-time condition. Rather than using antiquated paper-based systems or spreadsheets, Coast gives businesses a centralized, automated means for monitoring fixed assets across their entire lifecycle. Using a CMMS to track your assets poses the following advantages for your business:

Centralized Equipment Monitoring

Rather than having disjointed data silos in various spreadsheets or manual logs, a CMMS centralizes all critical asset data, including equipment locations, maintenance and inspection histories, and depreciation status within one digital platform. This allows for simplified, real-time data access for quicker decision-making, better collaboration across departments and improved asset accountability.

Automated Asset Tracking

A CMMS integrates with key asset sensors, providing real-time tracking of equipment performance. In addition to providing insight into the current depreciation status of your equipment, it can also detect when issues arise and send instant notifications to key leaders and maintenance technicians, so small problems can be addressed before they worsen and cause equipment breakdowns and unplanned downtime. 

Streamlined Maintenance Scheduling

Routine maintenance is critical to extending your assets’ lifespans. Coast can schedule preventive maintenance tasks and inspections based on usage, time intervals and performance data, helping to reduce unexpected failures and costly repairs. 

Asset Records

Every action, from inspections to repairs, is logged within Coast, creating a clear, time-stamped history for each asset. This audit trail is invaluable for compliance reporting, insurance claims or financial audits. It documents who performed what action and when, helping ensure transparency, reduce liability and support regulatory requirements like those tied to GAAP or ISO standards.

Don’t wait to refine your asset management processes. Book a free demo of Coast today to get started.