asset policy for a company should be a
guiding instrument for accounting and management. The policy doesn't
have to an
elaborate work, but should be thoughtful of the outcome needed for
A policy should include
of what a fixed asset is
keeps the fixed asset records
the fixed asset records should contain (in summary)
depreciation methods are determined
for new asset acquisitions
methods for assets
fixed asset should be defined, especially by dollar
amount. If the minimum amount of an asset is $1000 to be recorded as a
asset, then that should be stated. Often this policy of a minimum is
guided by tax laws and accounting standards. The owner or manager of a
business may want to track almost everything, this is not unusual.
Thought should be given to the cost of tracking assets over time, and
if it is really worth tracking assets that of lower value.
The department that is responsible for the record keeping should be
along with what the records should contain. Proper acquisition and
methods should be outlined. If the engineering or maintenance
to fill out forms for acquisition, disposal, or movement of assets,
The policy for determining the depreciation method should be mentioned.
high level document level, detail is not necessary, but should guide
as to how to acquire the method to be used. Often, the deprecation
determined by outside accounting firms or tax departments. Once a
determined, it is usually not changed, unless the tax laws change.
The policy is a high level document that guides the organization. More
work instructions and forms that need to be filled out for asset moves,
be developed in addition to the policy.