Fixed Asset Audit & Verification — every asset, accounted for.
Independent physical verification of property, plant and equipment, Fixed Asset Register reconciliation, Schedule II depreciation audit, impairment testing under AS 28 / Ind AS 36, and CARO 2020 compliance — by ICAI-registered Chartered Accountants.
For most companies, property, plant and equipment is the second-largest balance sheet line after inventory — and the one most prone to going stale. Assets are moved between locations and never re-tagged. Items written off in operations remain on the Fixed Asset Register. Depreciation continues on equipment that physically no longer exists. Without periodic verification, the FAR slowly drifts away from reality, and one day the auditor or a regulator asks the question that nobody can answer.
A fixed asset audit closes that gap. We physically verify every significant asset — by tag, by location, by serial number — reconcile what we find back to the FAR, and surface the inevitable list of missing assets, ghost entries, unrecorded transfers, and depreciation anomalies. The exercise is more important under CARO 2020, which requires the auditor to comment specifically on the reasonableness of management's verification programme, title deeds of immovable property, and revaluation.
Our fixed asset audit team handles single-location offices, multi-plant manufacturers, retail chains, and IT infrastructure-heavy businesses across Mumbai and India — combining physical verification with FAR reconciliation, Schedule II depreciation review, capitalisation policy testing, and impairment indicators under AS 28 or Ind AS 36.
Fixed Asset Audit Services We Offer
Physical Verification of PPE
On-site physical verification of land, buildings, plant and machinery, furniture, vehicles, IT equipment, and other tangible assets by tag, serial, and location.
Fixed Asset Register Reconciliation
Item-wise reconciliation of the FAR with physical findings — identifying missing assets, ghost entries, unrecorded transfers, and dual entries.
Schedule II Depreciation Audit
Verification of useful lives, residual values, and depreciation methods against Schedule II of the Companies Act, 2013 — with adjustment recommendations.
Asset Tagging & Mapping
Implementation of unique asset codes, barcode or QR tagging, and digital location maps — making future verifications faster and more reliable.
Capitalisation Policy Review
Review of capitalisation thresholds, treatment of borrowing costs, directly attributable costs, and the line between capex and revenue expenditure.
Impairment Testing (AS 28 / Ind AS 36)
Assessment of impairment indicators, recoverable amount computation, and verification of impairment losses recognised in the financial statements.
Capital Work-in-Progress Audit
CWIP ageing analysis, verification of costs capitalised, projects pending review, and timely transfer of completed assets to the relevant PPE block.
Disposal & Transfer Audit
Audit of asset disposals, scrap sales, inter-branch transfers, and write-offs — with verification of approvals, accounting entries, and tax treatment.
Our Fixed Asset Audit Process
FAR Review & Scoping
Review of the existing Fixed Asset Register, classification, depreciation policies, and identification of high-value items for priority verification.
Tagging & Location Plan
Asset tagging where missing, location-wise asset listings, and a verification plan covering all locations including branches, plants, and field assets.
Physical Verification
On-site verification by tag, serial number, and physical location — with condition assessment and identification of idle or scrapped assets.
FAR Reconciliation
Physical findings reconciled with FAR — variance list, missing assets, ghost entries, and unrecorded additions captured for management action.
Depreciation & Reporting
Schedule II depreciation re-computation, impairment indicators, CARO 2020-aligned observations, and a final report with recommendations.
Why Fixed Asset Audit Matters
Frequently Asked Questions
A fixed asset audit is the independent physical verification of property, plant, and equipment (PPE) — buildings, plant and machinery, furniture, vehicles, IT equipment, and intangible assets — and its reconciliation with the Fixed Asset Register. The audit also covers depreciation under Schedule II of the Companies Act, capitalisation policies, impairment indicators, and the existence and ownership of every asset on the books.
Companies are expected to physically verify their fixed assets at reasonable intervals — most businesses adopt an annual cycle, with high-value plant and machinery verified yearly and lower-value assets covered on a rotational basis over two to three years. CARO 2020 specifically requires the auditor to comment on whether the verification programme is reasonable, so an annual or planned rotational cycle is standard practice.
The Fixed Asset Register is a detailed record of every fixed asset owned by the entity — capturing asset code, description, location, date of purchase, original cost, additions, deductions, accumulated depreciation, net block, useful life, and depreciation rate. Under Section 128 of the Companies Act, every company is required to maintain a FAR with these particulars, and the auditor reports on its completeness and accuracy.
Schedule II of the Companies Act, 2013 prescribes useful lives for various classes of assets — companies must depreciate fixed assets over these useful lives using either the straight-line or written-down value method. Where the management adopts a useful life different from Schedule II, justification must be disclosed in the financial statements. The fixed asset audit verifies that depreciation has been correctly computed and aligned with Schedule II.
Asset tagging methods include physical metal or plastic tags with unique asset codes, barcode labels, QR codes scannable through a mobile app, and RFID tags for high-value or movable assets. Tagging enables quick physical verification, supports location tracking across branches and warehouses, and prevents duplication or omission in the Fixed Asset Register. The choice of tagging method depends on asset type, environment, and verification frequency.
Under AS 28 (or Ind AS 36 where applicable), companies must assess at each balance sheet date whether there is any indication that an asset may be impaired — for example, significant decline in market value, technological obsolescence, physical damage, or planned discontinuation of operations. If indicators exist, the recoverable amount must be estimated and any impairment loss recognised. The fixed asset audit checks for these indicators and verifies impairment computations where applicable.
CWIP audit verifies that all expenditure capitalised under Capital Work-in-Progress relates to assets being constructed or installed, that the costs are properly supported by invoices and project records, that ageing is reviewed for projects long under construction, and that completed assets have been timely transferred to the relevant PPE block. CWIP also requires CARO 2020 reporting on ageing and projects overdue or pending review.
CARO 2020 requires the auditor to report on several PPE matters: maintenance of proper records of PPE, physical verification by management at reasonable intervals and discrepancies noted, title deeds of immovable property held in the company's name, revaluation policy and amounts, benami property proceedings, and disclosure of intangible assets. A robust fixed asset audit ensures the auditor can comment positively on each of these clauses.
Get Your Fixed Asset Register Audit-Ready
Talk to our team about physical verification, FAR reconciliation, asset tagging, and Schedule II depreciation review — completed before your next statutory audit.
Talk to a Fixed Asset Auditor or call +91 9819 000 511