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Name
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Year end: |
Reviewed by: |
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Subject: Fixed Assets Valuation |
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Objective |
To ensure that assets recorded in the accounts are fairly valued. |
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Method |
Obtain/prepare a fixed asset register. Agree the method used to calculate depreciation to the depreciation policy in the accounts. Recalculate depreciation on closing cost or net book value and compare to the depreciation charge in the profit and loss account. Assess if reasonable. Pick a sample of items from the register, and agree cost to the invoices, and that depreciation has been calculated correctly. Review the register for any old assets and consider writing off (even if fully depreciated, cost may be overstated) Review the useful lives of assets compared with capital expenditure and replacement policy and assess if reasonable. Review sale values at the end of useful life compared with sales proceeds of assets sold in the year and assess if reasonable. Ensure the sale value is not depreciated. Check the policy for revaluation and ensure consistently applied for each class of asset. Ensure all investment properties stated at market value. Select a sample of revalued items and agree them to a valuation certificate. Agree from the fixed asset revaluation to the movement on the revaluation reserve. From the accounts, cast the fixed asset note to the accounts. Agree depreciation from the note to the profit and loss account, and the operating profit note to the tax computation. Check income on income generating assets. Consider writing down if losses are incurred to maintain the assets, or they are no longer expected to generate income. Ensure revaluation reserve is written down before writing off to p&l, according to applicable standards. |
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Result |
Page ref: Comments: |
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Conclusion |
According to the audit work performed, the objective has been met/has not been met. Problems recorded: |
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©Lynnix (UK) Ltd 19
Oct 2007