How to Prepare an Asset Register

Co-authored by Michael R. Lewis

Updated: March 29, 2019

An asset register — also known as a fixed asset register — is simply a record that clearly identifies all the fixed assets of a business. Fixed assets refer to assets that a business uses regularly to produce its income, and unlike assets like inventory, these assets are not considered products to be sold. The register allows a business owner to quickly retrieve information on an asset including its description, purchase date, location, purchase price, accumulated depreciation, and estimated salvage value.

Part 1 of 2:
Preparing To Create An Asset Register

  1. 1
    Learn the purpose of an asset register. Asset registers are typically used to help business owners keep track of all their fixed assets and the details surrounding them. It assists in tracking the correct value of the assets, which can be useful for tax purposes, as well as for managing and controlling the assets. A fixed asset register provides a single location to quickly learn about any asset owned by the business.[1]
    • Fixed assets refer to long-term assets that are used in the production of the business' income and typically refers to things like land, machines, buildings, office equipment, copyrights, and vehicles. Quite simply, they can be seen as assets not intended for sale but rather for use in production, as opposed to something like inventory.[2]
    • For example, assume a business owns a small fleet of trucks. The fixed asset register would describe the trucks (indicate color, make, model), indicate their purchase date and price, their amount of depreciation accumulated, and their estimated salvage value.
    • The asset register is important for keeping track of whether or not assets are still in possession or are working, and is an important way of of keeping track of the value of your assets. It can be helpful not only for business management purposes, but should also be provided to your accountant as it is an easy way for him or her to to find information regarding the assets and their values [3]
  2. 2
    Identify fixed assets by looking at the balance sheet of the business. In order for a fixed asset register to be successful, it is required that the information be accurate, complete, and comprehensive. To do this, it is important to make sure all assets are included in the register.
    • Look at the balance sheet of the business. Create a list of all the fixed assets that are listed and recorded here, as this indicates the assets that are currently reflected in the company's books.
    • These assets will typically be located under the assets section of the balance sheet. Typically, fixed assets will including anything under "property, plant & equipment" and will include land, buildings, equipment, and vehicles.
    • Note that fixed assets can also include things like patents, copyrights or brand names. These are known as "intangible assets", and can be found under the "intangible assets" portion of the balance sheet. A good tip is, if you plan on owning it for more than a year, it should be considered a fixed asset.
    • Intangible assets with a finite life must be written off (amortized) over the course of their useful life. A copyright, for example, is an intangible asset that is only valuable for as long as the copyright lasts. Assets with indefinite lives (such as goodwill, trademarks, and perpetual franchises) are not amortized.
  3. 3
    Identify assets by performing a physical audit, or walk-around of the company's locations. Perform a walk-around of the business location(s) to check and make sure all the assets in the balance sheet are listed. Make special note of any assets not listed.
    • If for example, you find a machine that is not recorded in the company's books, make sure you make note to include it in the register.The register should include assets both listed and unlisted in the books.
    • If an asset is not in the books, it is most often because the asset has been depreciated to zero and removed from the books. That is to say, the asset's value depreciated over time until it no longer had any accounting value.
    • Be sure to be thorough, and keep in mind that any piece of property that you plan on keeping and not converting into cash for over a year that is involved in the production of the company's income would be considered a fixed asset. This means things like office equipment, furniture, or fixtures would also be considered. These things are long-term, and are all involved — although indirectly sometimes — in the production of income.
  4. 4
    Decide on a method of organizing your asset register. Once you have a detailed list of all the company's fixed assets (from both a walk-around and the general ledger), it is time to create the structure for the register. Note the register can be kept physically, or digitally, depending on your preference. While there are several ways to organize an asset register, here are a few:
    • If you are opting for a physical asset register, one approach is to use a loose leaf binder, and simply allocate one page per asset. Each page would indicate the asset (for example, a fleet of trucks), and then list several categories of information to be filled in pertaining to the asset (these categories will be described in the next part). You can write out the pages by hand, although using a computer and printing is recommended.
    • If you opt for a digital version, using a spreadsheet is a wise idea. One way to organize a spreadsheet is to have a row for each asset, and then columns for information on each asset. For example, each row of the spreadsheet Asset Register would apply to a single, specific asset such as Truck, or Milling Machine. The horizontal columns would have titles such as Description, manufacturer, serial number or identifier, date of purchase, purchase price, etc. The next part will go into detail regarding each column.
    • You can also find numerous templates for asset registers online by simply searching "fixed asset register template" into a search engine.

Part 2 of 2:
Creating Your Fixed Asset Register

  1. 1
    Create an account record for each fixed asset. As mentioned earlier, each asset will need its own "account", or area to store the information. If you opt for a loose leaf binder, each page would feature an asset, and then various pieces of information. If you opt for a spreadsheet, each row would feature an asset. Regardless of your format, the following information is necessary for each account:[4]
    • Description: The description should be able to distinguish the specific asset from other similar assets. For example, a company that owns multiple Ford trucks might describe them by color, model, and year of manufacture (Ford 2012 F-250 brown truck). Note whether the asset is New, Used, or Reconditioned. Include the location of the asset here as well.
    • Serial number: This is the identification assigned by the manufacturer. If your company has also assigned a company ID, note that in your record.
    • Date of purchase: Include the date the asset was purchased.
    • Purchase price: Include the price the item was acquired at
    • Date asset placed in service:: List the first day of usage for the asset.
    • Estimated life of the asset: Here you would include how long you expect the item to last in years, or hours. This is also known as the depreciation period, which will be discussed in detail in the next part.
    • Salvage value: Include the salvage value — that is to say, the resale value of the asset at the end of its life. In many cases, this would not apply as the asset would be used until not capable of resale.
    • Depreciation method:Depreciation refers to the reduction in the asset's value over time, and this can occur according to several methods
  2. 2
    Select an appropriate depreciation period. The depreciation period is the period during which the value of the asset will decrease. In order to determine depreciation, it is important to first know the time period the depreciation will occur within.
    • A percentage of the asset's value is converted from an asset to an expense at the end of each accounting period during the depreciation period of the asset. The amount of the asset's value that is expended in each accounting period is determined by the depreciation method, which is explained later.
    • The depreciation period is based on the projected useful life of the asset. Contact the manufacturer to determine this specifically.
    • Often, the depreciation period for a specific asset is dictated by tax regulations. Confirm this with tax authorities.
    • You will need to determine if any intangible assets have finite lives. Goodwill, for instance, has an indefinite life and therefore is not amortized. Intangible assets with finite lives should be amortized for their recorded cost.
  3. 3
    Determine the most appropriate depreciation method. Since each asset depreciates over time, it is important to know what the common depreciation methods are, so it can be indicated on the fixed asset register.[5]
    • Similar to the depreciation period, allowable depreciation methods are often dictated by tax authorities.
    • Straight-line is a very common method for depreciating assets. With this method, the percentage of the value of the asset that is depreciated is the same in each period. For instance, if an asset has a depreciation period of 5 years, then, under straight-line depreciation, 20 percent of the asset value will be converted to expense each year.
    • Accelerated depreciation methods increase expense realization in the short term, which results in lower net income in the early depreciation periods of the asset. This shifts depreciation expense from later periods to earlier periods and has the effect of deferring tax expenses to the later periods. Note, however, that accelerated depreciation also reduces shareholder equity more rapidly. Contact an accounting professional to determine if this method is right for you, as it can have certain tax benefits.
    • The depreciation method cannot be changed once an asset is placed into service and a depreciation method is applied to it.
    • For further clarification on this, consult an accounting or bookkeeping professional.
  4. 4
    Conduct periodic audits to verify the accuracy of the fixed asset register. Each year, ensure the accuracy of the register by doing a physical inventory check. As mentioned earlier, compare physical assets with assets on the books, and make sure that the asset register is always up to date
    • Assets that have been lost, stolen or have become nonfunctional no longer have value to the organization and, therefore, the remaining book value of such assets must be written off. It is very important, however, to keep all records whether or not the asset has any value, or is in use or not.

Community Q&A

Add New Question
  • Question
    If I find that an asset was omitted how do I include it in the books?
    Community Answer
    Check if the same is required to be included. In certain circumstances, the asset may not be required to be included in the books. For example, the asset may have been completed, depreciated or the asset may not have met the criteria for inclusion of the same in the books as fixed assets. If it is determined that the asset has not been included, then include it in the books by passing a journal entry. Note: The assets that have not met criteria for inclusion in the books, should also be preferably listed in the fixed assets register; however, a detail field can be added to identify the nature of these assets.
  • Question
    If I buy a new vehicle that costs $21,000, how do I determine its book value?
    Community Answer
    In simplest terms, the book value is the cost (or basis) of the asset minus accumulated depreciation. Immediately after purchase, the new vehicle has a book value equal to its cost. For example, $21,000 cost minus $0 depreciation equals $21,000. At the end of the first year, the depreciation attributed to the vehicle is (say) $1,500. The book value is $21,000 - $1,500 = $19,500. Second year depreciation is $2,500, accumulated depreciation for the two years is $4,000 and the book value is $21,000 - $4,000 = $17,000.
  • Question
    What is a physical asset?
    Community Answer
    A physical asset is the same thing as a tangible asset. It is an asset that you can see and touch, for example vehicles, machinery, furniture, etc.
  • Question
    Under what circumstances would it become necessary to reduce assets on an asset register?
    Community Answer
    Generally anything that reduces the value of the asset should be recorded, and once the value reaches zero, the item has no value. It may continue to remain on the books whilst it is still in use, but is effectively removed from the register once you have disposed of it or no longer have it. There are many circumstances that could reduce the value of an item, including assets being damaged or stolen, assets naturally decreasing in value more quickly than originally anticipated as a result of external factors (e.g. new technology which tends to get cheaper as uptake increases, resulting in the value reducing), assets reaching the end of their useful life, or normal depreciation.
  • Question
    Do I enter second hand items on the asset register?
    Community Answer
    If that item falls within the definition of Fixed Assets, then yes, you should. This is because that "second hand" item is new for your business, so it has nothing to do with prior users.
  • Question
    What's the difference between asset register and property, plant and equipment register? Are they the same?
    Community Answer
    Yes, they are the same. Fixed asset register are those assets that are not for sale, unlike inventory. Therefore, furniture, property plant and equiptment, fixtures fall under fixed asset register.
  • Question
    The Column for Condition in the register, does it mean condition during purchase or condition at a particular time?
    Community Answer
    There is no hard and fast format for which columns are to be inserted in the fixed assets register. Any column can be used in the that best suites its user. Therefore, column for condition may represent any of the above mentioned purpose.
  • Question
    Are there any assets that do not depreciates in value? What are those?
    Community Answer
    Depreciation is used to identify the decrease in value of any asset in the specific accounting period. Any asset that does not lose its value due to usage or due to an increase in its life does not depreciate in value. A common example of such type of assets in freehold land, because a land does not lose its value due to usage or increase in the life of the land. However, if the land is of the gold mine, then it will depreciate as it will loose its value is the gold is mined from it. Or, if the land is coastal and erodes into the sea or is swamped by sea level rise, then it is depreciated too.
  • Question
    Would an alarm system be an asset?
    Community Answer
    Yes. An alarm system is an asset, as it protects your other assets.
  • Question
    If any asset value is nil and the assets assistance in mill would be longer than 3 or 4 years, what should I do?
    Community Answer
    You have three choices. First, annotate the entry to indicate that although it has no book value, its lifetime expectancy is such that it remains part of the asset register. Second, you can remove it from the register. Lastly, you can re-value the asset and adjust its value accordingly. Do this only after a consultation with your accountant to ensure that you will not be negatively affected by such a re-valuation. (For example, it is possible that such an action could increase tax liability.)
Show more answers
Ask a Question
200 characters left


      About This Article

      Entrepreneur & Financial Advisor
      26 votes - 85%
      Co-authors: 17
      Updated: March 29, 2019
      Views: 277,920
      Thanks to all authors for creating a page that has been read 277,920 times.

      Reader Success Stories

      • KM

        Krishna Moorthy

        Nov 30, 2016

        "The article is exhaustive and provides insight for a person like me who does not have a professional finance background. I think it also answers most of FAQs on the subject. Thank you."..." more
      • PM

        Pixo Marcia

        Oct 20, 2016

        "The guidelines to create an asset register was insightful to me, who had no background knowledge of an asset register."..." more
      • PP

        Polyn Patrick

        Aug 2, 2016

        "Thanks, wikiHow! This article is relevant to what I needed for my work, I found it really helpful."
      • KK

        Khumalo Khumza

        Sep 21, 2016

        "it was of great help in understanding the importance of, and how to compile an asset register."
      • N


        Sep 21, 2016

        "It helped me very much because I did not have a clue about how to to asset register."
      • BL

        Bruce Lawton

        Sep 14, 2016

        "The information was really easy to follow, it was really helpful. Thank you."
      • IY

        Ibrahim Yunusa

        May 18, 2016

        "Description is splendid, made everything seem simple and easy to apply."
      • NN

        Nadew Nura

        Jul 21, 2016

        "It's very good and it helped me with how to control my fixed asset."
      • SK

        Selma Natangwe Kambidhi

        Sep 21, 2016

        "I never knew how asset register works, but now I do. "
      • JM

        Jeff Machariah

        Nov 14, 2016

        "Very informative, well detailed and vastly helpful."
      • SM

        Stanley Mwanza

        Jan 2, 2018

        "Specific steps in itemizing the assets."
      • RB

        Raphael Bwalya

        May 8, 2017

        "I have learned a lot from the article. "
      • NM

        Natalie Matthysen

        Oct 1, 2018

        "Awesome read to assist learners."
      • MA

        Morg Ana

        May 26, 2017

        "This helped me apply for a job."
        Rated this article:
      • TA

        Tope Aribanusi

        Jun 6, 2016

        "Great material for training!"
      Share your story

      Did this article help you?