Which Accounting Standards in the UAE Address Fixed Asset Accounting?

A company’s fixed assets are tangible or intangible assets that it owns for use in its commercial operations. Buildings, machinery, equipment, furniture, and fixtures are examples of tangible fixed assets that have a physical shape and can be touched. Patents, goodwill, trademarks, and licences are examples of intangible fixed assets. Accounting firms in the UAE utilise standards to ensure the effective management of fixed assets in order to avoid financial loss and decrease any potential risks associated with managing these assets. They are as follows:

Fixed Asset The acquisition process, Maintenance, and Disposal Records

Companies that own fixed assets in the UAE are required to keep records of their acquisition and disposition. These documents aid in estimating fixed asset depreciation. A company’s financial statements will be incomplete unless its fixed assets are amortised. Such information is critical for investors to make informed decisions about investing in or selling stocks based on market conditions. A fixed asset manager is responsible for tracking every stage of acquiring, managing, and disposing of a fixed asset. The process of planning and budgeting for the sale of an asset is referred to as this. Thus, the fixed asset manager should analyze the worth of the fixed assets to make it easier to calculate their present value if they need to be sold soon.

Physical Checks on a Regular Basis

The correctness of fixed asset records should be physically examined on a regular basis, according to UAE Accounting Standards. This is to guarantee that the valuations allocated to fixed assets are reasonable and suitable, given the assets’ age and condition, as well as any changes in their worth. Physical verification of fixed asset data can also assist in identifying discrepancies between information recorded for the asset on its account and its actual state or location. Many businesses in the UAE lose control of their fixed assets since no one notices the earlier versions once the new ones come. It has no immediate impact on your company’s activities or output, but your company will suffer losses if your assets continue to vanish. A fixed asset manager should be able to keep track of all fixed assets while also preventing loss through periodic physical verifications.

Examine any assets that are no longer in use or that have become obsolete.

Many businesses have a large number of assets that they do not use but keep. Because they do not want to sell them or believe that these assets will be helpful one day. For example, when a company purchases personal laptop computers, the old ones are stored in a warehouse and let to rust. A good fixed asset manager is in charge of tracking and managing such business assets. While the majority of fixed assets that are no longer in use are meant to be discarded or given, fixed asset standards require that these items be documented.

Limiting the Movement of Some Assets

Certain fixed company assets remain with the firm indefinitely, potentially because they are bespoke equipment designed expressly for a specific role and cannot be moved. However, there comes a moment when these things lose their value and are abused as a result. The employees have been observed obtaining commercial property without following proper procedures, which might be detrimental to the corporation. Tracking devices are occasionally installed on fixed assets in such circumstances to prevent them from being illegally disposed of or transported outside of a certain area.

You’ve come to the correct spot if you’re looking for the top accounting firm in Dubai, UAE to assist you manage your fixed assets while adhering to the rules. Forthrigthconsultancy, Dubai’s leading accounting business! With all of your investments in your firm, it is critical that your fixed assets are correctly accounted for. We specialise in this area and can assist you in efficiently managing them so that they do not result in financial penalties or tax concerns. If you wish to learn more about our services, please contact us right now!