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How to inventory fixed assets

Fixed assets

It is also known as tangible assets or property, plant and equipment, which will be identified to learn how to inventory fixed assets, a term used in accounting related to assets and property that cannot be easily converted into cash, and can be compared to current assets such as cash or bank accounts, and described as liquid assets assets, in most cases only tangible assets are referred to as fixed, and the International Accounting Standard or IAS 16 defines fixed assets as the assets whose future economic benefits are likely to flow to the origin, and whose cost can be measured reliably. Fixed asset inventory.
inventory fixed assets
inventory fixed assets

Fixed asset benefits

To complement the knowledge of how to inventory fixed assets, the benefits of these assets will be identified. Examples of fixed assets have already been clarified. Information about companies’ assets helps to create accurate financial reports, commercial estimations, and comprehensive financial analysis. These reports are used to determine the financial soundness of companies and take action. The decision about buying shares in it or lending money, and fixed assets are especially important for industries that depend on strong capital such as manufacturing, which require large investments in PP&E, which is property, plant, equipment, property, plant and equipment, when the company reports net cash flows Consistently negative due to the purchase of fixed assets, this may be a strong indication that the company is in a state of investment or growth.

How to inventory fixed assets

The answer to how to inventory fixed assets begins with determining the cost of the fixed asset, which is carried out according to the concept of historical cost, which is more reliable when the assets are valued at cost instead of the market value, as this concept means loading the fixed asset for all that the origin incurred in order to obtain that The asset is until it is ready for actual use at the origin. When purchasing the asset from abroad, the accountant must determine all the expenses and expenses related to obtaining this asset and include the original price according to the invoice, transportation costs, shipping, property registration, insurance, loading, installation expenses and customs fees. The fixed has been manufactured or produced inside the facility, such as the establishment erecting a building for the administration or the factory, or its manufacture of some equipment for use in the manufacture of the products that the origin deals with. and management of the origin that were used in the production process.

The inventory of fixed assets is intended to ascertain the existence of this asset, verify the project's ownership of this asset, know its net value at the end of the accounting period, and make the necessary inventory adjustments for this asset, in order to reflect the true value in the statement of financial position. Services and benefits that will be benefited from during future periods of time, and this represents the useful life of the asset, and according to the rule of matching revenues at the cost of obtaining them, the cost of this asset must be reduced, which are the benefits for the accounting periods from which it is used, which is consistent with what was stated in the definition of depreciation that you set The American Society of Accountants and Knowledge is abbreviated AAA, and calculating and recording depreciation in the books is the primary objective of inventory adjustments for fixed assets, except for lands, as they are not subject to depreciation. likely to rise.

The depreciation of fixed assets in the accounting concept is the process of allocating or distributing the cost of fixed assets over the accounting periods benefiting from the services of this asset. Among the factors that determine the depreciation premium are the cost of the asset or the cost of acquiring the asset, the service or productive life of the asset, and finally the value of scrap or waste. The methods for calculating depreciation are The straight-line method, the double-declining balance method, the sum of years’ digits method, the re-estimation method, the utilization method, and finally the production units method. As for the accounting treatment of depreciation, it is done through the direct method or the indirect method.
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