Internal Control of Fixed Assets
Internal Control fixed assetsInternal Control of Fixed Assets
1.Capital investment budget is prepared upon approval from the Board or the business owner. The approved budget shall be informed to below divisions.
- 1.1 Purchase Division or Purchasing Officer
- 1.2 Engineering Division
- 1.3 Accounting Division
2. Each time of fixed asset purchase shall consider on the following:
- 2.1 It is the necessary payment
- 2.2 The price requested for approval is too high or low.
- 2.3 Asset purchased for replacement is useful and worthy for investment.
- 2.4 Accounting Division correctly posts the payable.
- 2.5 Useful life is properly estimated.
3. Asset Register or Subsidiary Accounts shall declare the following.
- 3.1 No. and storage place for each piece of article
- 3.2 Useful life and depreciation rate
- 3.3 Cost price, accumulated depreciation, annual depreciation, and carried forward accumulated depreciation.
- 3.4 Total number of each transaction shall be equal to control account.
4. The following shall be checked in case that register or subsidiary account is available.
- 4.1 Asset is marked with Registration No.;
- 4.2 Count is performed whether asset is existent according to Register;
- 4.3 If incomplete counting, check is immediately performed.
- 5. Depreciation calculation policy is certainly formulated.
- 6. Depreciation is accurately classified as the expense of the Division that uses the asset.
- 7. After estimation of all depreciations, price at 1 Baht is remained in the account for good internal control.
- 8. Purchase and use requisition of miscellaneous tools shall be controlled.
- 9. High priced asset is insured and the insured amount is worthy of purchase price for replacement when damage occurs.
- 10. Accounting writing-off or location movement shall be approved.
- 11. Sale shall be performed like product.
- 12. Expense policy for fixed asset and maintenance and repair expense is explicitly formulated.