Fixed Assets Management Checklist

Pull the current capitalization policy from the accounting manual. Most SMBs use a $2,500–$5,000 threshold to align with the IRS de minimis safe harbor election under Reg. 1.263(a)-1(f). Confirm the threshold hasn't changed and that the policy is on file with the safe-harbor election attached to the most recent return.

Run a transaction detail report on all asset GL accounts (machinery, leasehold improvements, furniture, computer equipment, software). Also scan repairs & maintenance over the cap threshold — large R&M entries are a frequent source of misclassified capex.

For each new acquisition, populate asset ID, description, in-service date, cost, asset class, useful life, depreciation method, location, and custodian. The in-service date drives depreciation start — not the invoice date or PO date.

For book purposes, confirm useful lives reflect actual usage patterns under ASC 360. For tax, confirm MACRS class lives (5-year computer equipment, 7-year furniture, 39-year nonresidential real property). Flag any asset where a usage change suggests a life revision — that's a change in estimate, prospective only.

Generate the depreciation journal from the FAR (Sage Fixed Assets, NetSuite FAM, QBO Fixed Asset Manager, or schedule-driven workpaper). Maintain separate book and tax schedules — bonus depreciation and Section 179 only hit the tax schedule.

Post the entry: debit depreciation expense by class, credit accumulated depreciation by asset class. Memo the JE with the FAR run reference number and attach the depreciation schedule as the supporting workpaper.

Annual full count or rolling quarterly count by location. Coordinate with site managers; print the FAR location report in advance so counters can sight-verify by tag number rather than working from memory.

Confirm tag, condition (in service / idle / impaired), and location for each item. Flag missing assets and unrecorded assets (capex that bypassed the FAR) on the count sheet.

Investigate each variance: untagged transfer, unrecorded disposal, or possible theft. Missing assets that cannot be located after a reasonable search should be retired with a write-off AJE and the controller's authorization. Document the resolution per item on the count workpaper.

Pull signed asset disposal forms from operations. Each disposal needs an authorization signature per the SoD policy — the requester cannot also approve. Common gotcha: equipment hauled off the dock with no paperwork creates a phantom asset on the FAR for years.

Gain/loss = proceeds − net book value (cost less accumulated depreciation through disposal date). Don't forget partial-period depreciation up to the disposal date. For tax, also flag Section 1245 recapture on equipment sold above NBV.

Mark each disposed asset retired with disposal date, proceeds, and gain/loss. Confirm depreciation stops the following period — leaving a retired asset active is a frequent close-cycle error that overstates expense.

Confirm the requester, approver, FAR maintainer, and reconciler are different people. In small teams where this isn't possible, the controller's monthly FAR-to-GL review is the compensating control — document the review with a sign-off.

Beginning balance + additions − disposals = ending balance, by asset class, for both cost and accumulated depreciation. This is the schedule auditors will request first under PBC; having it ready quarterly avoids a fieldwork scramble.

Most states with personal property tax (TX, FL, VA, others) require annual renditions by location with cost and acquisition year. Update the tracker with this period's additions and disposals so the rendition is a copy-out, not a rebuild.