TR – 6 Fixed Assets Inventory and Records


Section 230 of the Companies Ordinance, 1984 requires every company to keep proper books of accounts with respect to all assets of the company. Usually fixed assets comprise a significant portion of a company’s assets. No guidance is available for companies as to how the fixed assets records be maintained. Accordingly, it is felt that guidance may be given to our members. Following are important aspects, which require maintenance of proper records that help in preparation of Financial Statements:

(a)    Periodic reconciliation of the underlying records of fixed assets with the accounting records (General Ledger).
(b)     Reconciliation of the periodic physical inventory of fixed assets with fixed assets records.
(c)     Determination of cost and accumulated depreciation of each item of fixed assets at the time of retirement or disposal.


2.1    Fixed Assets records
Adequate itemized record of fixed assets should be maintained which at     minimum must indicate following particulars:

(a) detailed description of each item
(b) original cost of the item
(c) date of its acquisition
(d) classification of the item
(e) the location and/or the custodian of the item
(f)  the rate of depreciation
(g) accumulated depreciation
(h) depreciation charge for the period
(i)  the department / cost center / product to which the depreciation is charged
(j)  date of revaluation (if any)
(k) revalued amount (if any) of the items
(l)  depreciation on revalued amount
(m)accumulated depreciation on the revalued amount

2.2        Physical inventory of fixed assets

Physical verification of fixed assets should be carried out on at regular interval and should be reconciled with the fixed assets records and adjusted accordingly.

This revised TR – 6 (2012) supersedes the requirement as contained in TR – 6 of 2004.

(230th meeting of the Council – December 17, 2011)