How do you maintain a fixed asset register, and how do you reconcile it with the general ledger?
What the interviewer wants to hear
- Records each asset with tag, location, cost, date and useful life
- Tracks additions, disposals, transfers and depreciation
- Reconciles register totals to GL balances each period
- Physical verification of assets
- Capitalisation policy and threshold
Model answer
A fixed asset register lists every asset individually: asset tag, description, location, custodian, purchase date, cost, useful life, depreciation method, accumulated depreciation and carrying amount. I update it whenever an asset is capitalised, transferred, impaired or disposed of, following a written capitalisation policy so small items are expensed consistently. Each month or quarter I reconcile the register totals for cost and accumulated depreciation, by asset class, with the balances in the general ledger. Differences usually come from additions booked in the ledger but not tagged, or disposals not removed. I also make sure capital work in progress is moved to assets once they are ready for use. At least once a year, often as required by CARO for Indian companies, we physically verify assets against the register, and missing or idle items are investigated and written off or impaired.
Can you answer it under time pressure?
Take a timed medium round and get scored on every answer.
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