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- This topic has 3 replies, 2 voices, and was last updated 2 years ago by Kim Smith.
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- October 5, 2021 at 9:21 am #637007
Hello Kim, hope u are well.
sir, how often should a company make full physical varication of assets.
thanks in advance.
October 5, 2021 at 5:26 pm #637053There are no specific rules – it will depend on the company’s policy. You would expect any company to be inspecting all significant items of plant and equipment (including vehicles) around the reporting date – to confirm their existence and condition (impaired?) and the accuracy of the non-current asset register which will record depreciation for the year and be reconciled to the balances in the general ledger accounts (which should agree to the carrying amount(s) in the financial statements).
Although individual non-current assets will generally cost more than individual items in inventory, they are less susceptible to theft because, for example, they are physically less portable (and may be immovable!) Also, by their nature, they are used in day-to-day operations – I think I would notice if I went into my office in the morning and my desk, PC and printer had been removed(!)
So there isn’t the same need to physically inspect assets on a more regular basis.October 8, 2021 at 7:54 am #637235That makes sense.
got it sir, thanks for the detail explanation, I really appreciate itOctober 8, 2021 at 10:09 am #637238You’re most welcome!
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