Fixed Asset Verification & Capitalization – Ensure Compliance & Accuracy
- Dhananjay Jadhav
- Sep 19, 2025
- 3 min read
Updated: Sep 19, 2025
Managing fixed assets is one of the most critical areas in finance and compliance. In many companies, errors in fixed asset accounting lead to inflated books, incorrect depreciation, and even tax and audit challenges. At DP Jadhav & Co., we help businesses establish control, ensure compliance, and improve accuracy through comprehensive fixed asset verification and capitalization services.
🔎 Common Issues Companies Face with Fixed Assets
Over the years, we have observed that businesses across industries—manufacturing, EPC, pharma, food & beverages, distilleries, IT—face similar challenges in managing their asset base:
Improper classification (e.g., plywood, wiring, fittings shown as separate assets instead of part of building).
Bulk capitalization without componentization (e.g., wine barrels, machinery spares grouped as a single entry).
Assets physically missing but still shown in books (ghost assets).
Depreciation charged to wrong plant due to poor inter-plant transfers.
Renovation and replacement not recorded properly (old assets not written off).
Capital Work in Progress (CWIP) pending for years without capitalization.
Lack of barcoding/QR tagging, making physical verification difficult.
Software and IT assets wrongly treated as tangible fixed assets.
Insurance schedules not matched with the asset register.
These issues not only distort financial reporting but also impact profitability, tax planning, audits, and even business valuations.
Our Fixed Asset Services
At DP Jadhav & Co., we provide end-to-end solutions to ensure your fixed asset records are accurate, compliant, and audit-ready. Our services include:
1. Fixed Asset Verification
Complete physical verification of assets across all locations.
Barcode / QR code tagging for easy tracking.
Reconciliation of physical vs. book records.
2. Capitalization & Reclassification
Correct grouping of assets (Building, Plant & Machinery, Furniture, Intangibles).
Componentization of large assets (as per Ind AS 16/AS 10).
Review of useful lives and depreciation methods.
3. Asset Transfer & Write-off Accounting
Proper accounting of inter-plant / inter-company transfers.
Identification and removal of scrapped, sold, or obsolete assets.
Assistance in impairment testing and provisioning.
4. Capital Work in Progress (CWIP) Review
Verification of projects under implementation.
Timely capitalization of completed projects.
5. Compliance & Audit Support
Preparation of updated Fixed Asset Register (FAR).
Alignment with statutory requirements under Companies Act, Schedule II, Ind AS 16, and Income Tax Act.
Support during statutory, internal, and cost audits.
6. Insurance & Valuation Support
Matching insurance schedules with FAR.
Assisting in valuation for M&A, banking, or insurance purposes.
Why Choose DP Jadhav & Co.?
Industry Expertise: 16+ years of experience across leading industries.
Practical Insights: Hands-on knowledge of real asset challenges (from barrels in wineries to heavy machinery in manufacturing).
Technology Integration: QR/barcode-enabled solutions for tracking and verification.
Compliance Focus: Ensuring adherence to Ind AS, Companies Act, and tax rules.
Value Addition: Helping management optimize depreciation, reduce ghost assets, and ensure accurate profitability by plant/location.
Team successfully completes asset verification at Varroc Engineering, ensuring compliance and accuracy in fixed asset management.
Final Word
Fixed assets are not just numbers in the balance sheet—they represent your company’s true investment in growth. Mismanagement can result in financial leakages, audit issues, and even regulatory penalties. At DP Jadhav & Co., our aim is to bring clarity, compliance, and control to your asset management practices.
📩 To know how we can help your business, connect with us at contact@dpjadhav.com or visit www.dpjadhav.com.
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