Objectives in Maintaining A Fixed Asset Register (FAR)
A FAR must be kept in order to be in compliance with legislation governing corporations, companies, etc. It allows a company to keep track of details of each fixed asset, ensuring control and preventing misappropriation of assets. It also keeps track of the correct value of assets, which allows for computation of depreciation and for tax and insurance purposes. The FAR generates accurate, complete, and customized reports that suits the needs of management.
A FAR also allows a company to keep track of fixed assets that are not under simple, direct control of the company. This means owned and leased assets, assets under construction, and imported assets.
The FAR can also be used to aid in capital budgeting and to keep track of amount provided for asset retirement obligation (ARO) in respect of each asset as required by US GAAP (FAS – 143).
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