Internal Controls
Authoritative Source
Fixed Asset Register (FAR)
Detailed sub-ledger tracking property, plant, and equipment assets, locations, and depreciation.
Detailed Definition & General Ledger Context
Fixed Asset Register (FAR) is governed by Internal Controls in general ledger financial reporting and fixed asset sub-ledgers. Maintaining accurate records of Fixed Asset Register (FAR) is vital for audit compliance, asset balance verification, and tax schedule reconciliation.
Mathematical Standard & Equation
FAR Net Book Value = Total Historical Cost - Total Accumulated Depreciation
General Ledger Journal Entry Standard
Debit: Fixed Assets Expense Account
Credit: Fixed Assets Contra-Asset / Payable Liability
Credit: Fixed Assets Contra-Asset / Payable Liability
Common Operational Pitfalls
- Failing to reconcile fixed asset sub-ledgers with the general ledger trial balance monthly.
- Conflating IRS MACRS tax depreciation tables with GAAP straight-line financial reporting.
- Misclassifying lease obligations under ASC 842 capitalization standards.