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Fixed Asset Inventory & Reconciliation

Although fixed asset controls are considered low risk by auditors, they need attention - a lack of fixed asset controls can heighten risk to your organization. Are your fixed asset controls effective? Is your organization paying personal property taxes on ghost assets? Best practices enhance proper accounting, valuations and financial reporting.
 

Consulting Services for Fixed Asset Management
Inaccurate fixed asset records can blindside you and your organization, heightening strategic, financial and operational risk. Implications include:

The post-Sarbanes-Oxley (SOX) environment emphasizes corporate and company officer accountability, and both US GAAP and IFRS expect enhanced transparency. Fixed asset records – which generally represent the biggest line item of a company’s balance sheet – are undergoing greater scrutiny than ever. The importance of an accurate and well-documented fixed asset record is paramount, but maintaining a reliable fixed asset inventory is a challenging, labor-intensive task for any enterprise, public or private.

American Appraisal assists clients with fixed asset inventory and reconciliation needs on a daily basis. Our public and private-sector clients have different fixed asset inventory and reporting challenges. However, both rely on accurate information to account for, control and manage their real and personal property assets.

What We Do
American Appraisal’s fixed asset inventory and reconciliation service provides:

  • Wall-to-wall inventory of all fixed assets to ensure that accounting records reflect assets on hand
  • Assistance in identifying assets that are no longer on hand (unrecorded retirements)
  • Validation of assets’ historical book value for use on financial statements

Our services involve four phases:

  • Project planning
  • Inventory and tagging
  • Reconciliation
  • Reporting

Project Planning
Our comprehensive project planning phase includes thorough, detailed reviews of your policies, procedures and fixed asset accounting records.  We work with each client to develop a clear, mutual understanding of the respective tasks and responsibilities.

Inventory and Tagging
During our inventory and tagging phase, we:

  • Inventory all fixed assets in accordance with the scope of the engagement.  Typically, this is consistent with the capitalization policy of the client.
  • Record existing tags and/or apply a new bar coded tag to each inventoried asset, working with RFID tagging as requested, and record all tag number(s) as part of the asset record.
  • Conduct a same-day review of each day’s inventory, and revisit areas the next day if discrepancies are found.
  • Perform sample testing of major locations within the facility.
  • Conduct a final walk-through of the facility to ensure that no fixed assets were missed.

Reconciliation
Upon completing the inventory, American Appraisal utilizes its proprietary e-PRAIS® software to perform a detailed, line-by-line reconciliation of all items identified during the inventory to the fixed asset records.

Our reconciliation identifies:

  • Assets that are inventoried and traced to the fixed asset accounting record, or matched assets
  • Assets included in the fixed asset accounting records that were not identified during the inventory, or unrecorded retirements
  • Assets that were inventoried but not identified in the fixed asset accounting records, or unrecorded additions

The simple tag/serial number match performed by most firms limits a reconciliation effort to a comparison of an inventory to fixed asset records by only two data elements. This results in a very large quantity of additions and retirements because of the substandard match rate (generally lower than 50%). These results are not realistic when compared to actual records of purchases and disposals, and will be questioned by internal or external audit. American Appraisal’s detailed line-by-line reconciliation process ensures comprehensive fixed asset records that stand up to audit scrutiny.

Reporting
Reports issued by American Appraisal are in accordance with SOC 1 and stand up to scrutiny from all applicable agencies and both internal and external audit review. Our deliverables include:

  • A Fixed Asset Inventory and Reconciliation Report in hard copy and PDF, with the following exhibits:
    • Fixed Asset Accounting Summary Report
    • Fixed Asset Accounting Ledger Report
    • Fixed Asset Unrecorded Additions Report
    • Fixed Asset Unrecorded Retirements Report
    • An Excel file formatted to the client’s specifications

American Appraisal also provides data conversion services. Our programming staff can convert final fixed asset data into several different software applications.

Services for Regulatory Compliance
American Appraisal maintains dedicated consulting groups for telecommunications, manufacturing, healthcare, education and state and local governments. Our fixed asset inventory and reconciliation services help our clients in these areas comply with all applicable accounting standards, including:

  • Governmental Accounting Standards Board (GASB) 34 and 35
  • SOX Section 404
  • Office of Management and Budget (OMB) Circulars A-21 (CFR Part 45), A-110 and A-133
  • Federal Accounting Standards Advisory Board (FASAB) Executive Order 13327
  • Various Financial Accounting Standards Board (FASB) codifications
  • ASTM International standards for fixed asset management
  • CFO Act

Why American Appraisal?
American Appraisal’s dedicated fixed asset consultants operate from offices throughout Europe, Asia-Pacific and North and South America. Each year, we provide fixed asset inventory and reconciliation services for hundreds of clients, including some of our nation’s largest manufacturers, telecommunications leaders, universities (both public and private), healthcare systems and various state and local governments. We are recognized for establishing our profession’s best practices in fixed asset inventory and reconciliation.

Client Quotes

"American Appraisal was always responsive and professional.  The consultant was easy to work with ... It was a pleasure..."

Manager, Fixed Asset Accounting
NRG Energy, Inc.

"... the professionalism and product have been outstanding.  I appreciate all of their expertise and understanding of what is needed ..."

Director of Finance / Controller
Mission Hospital

"The onsite appraiser was very knowledgeable and professional.  ... I received quite a few great comments about him from our staff members."

Business Manager
School District of Shiocton
 

 

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