# Fixed Asset Reconciliation: Register, Ledger and Count

- Author: PreciseBankFlow (https://precisebankflow.com)
- Published: 2026-10-17
- Category: Account reconciliations
- Canonical: https://precisebankflow.com/blog/fixed-asset-reconciliation

> How to run a fixed asset reconciliation: the register to the ledger, additions and disposals, accumulated depreciation and a physical spot check.
A fixed asset reconciliation proves three things: the fixed asset register agrees with the ledger for cost and accumulated depreciation, every addition and disposal in the period is on both, and the assets on the register physically exist. You tie the totals, roll each balance forward, recompute depreciation, then walk the floor with a sample.

## Fixed asset register against ledger cost and depreciation

The fixed asset register is the list of individual assets with their cost, in-service date, useful life and depreciation to date. The reconciliation compares two register totals, cost and accumulated depreciation, with the matching ledger accounts at the same date. Both must agree, account by account, before any other test is worth running.

Compare at the level the ledger is kept. If the chart of accounts splits fixed assets into buildings, machinery, vehicles and computer equipment, total the register by those same classes and compare each class with its own account. A company total that agrees can hide a laptop booked to buildings and a building improvement booked to computers. Class totals catch that, and they matter because each class usually carries a different useful life.

### What the register needs for each asset

- **Asset number and tag**, so the item can be found on the floor.
- **Description and location**, specific enough to tell two similar machines apart.
- **Class**, matching a ledger account.
- **Cost**, including delivery and installation where those were capitalized.
- **In-service date**, useful life and depreciation method.
- **Accumulated depreciation** and **net book value** at the balance date.

Many companies hold the register in a spreadsheet; others use a module of the accounting system. Either works, provided the register is the only place new assets are added. A second, informal list kept by operations is a frequent source of disagreement.

## Which fixed asset additions belong in this period's reconciliation?

Fixed asset additions belong in the period when the asset is acquired and capitalized under the company's policy, and depreciation starts when it is placed in service. Two rules sort most purchases: a written capitalization threshold, below which items are expensed, and a useful life of more than one year.

The tax rules make the same distinction. [IRS Publication 946 on depreciation](https://www.irs.gov/publications/p946) states that depreciable property must have a useful life that extends substantially beyond the year it is placed in service, that land cannot be depreciated, and that depreciation begins when the property is ready and available for its specific use. Book policy can differ from tax, so keep the book policy in writing.

### Tracing additions both ways

Test additions in two directions:

1. **From the ledger to the register.** Pull every debit to the fixed asset accounts in the period and find each on the register with the same cost and date.
2. **From purchases to the ledger.** Scan the period's large payments, including those coded to repairs and supplies, for items that should have been capitalized. A new compressor booked to repairs never reaches the register.

Some additions are built rather than bought. When employees install or construct an asset, their wages may be capitalized as part of its cost, and those amounts have to leave payroll expense. The [payroll reconciliation of register, ledger and tax forms](/blog/payroll-reconciliation) is where that reclass should be visible.

Assets bought with a loan are a second trap. The purchase is often recorded straight from the lender's closing statement rather than from a payment, so it can bypass the usual purchase review. The [loan reconciliation to the lender's statement](/blog/loan-reconciliation) ties that borrowing to its own account.

### Construction in progress

Projects that are not yet finished sit in a construction-in-progress account with no depreciation. List each open project on its own tab, with costs to date and an expected completion date. When the asset goes into service, move its full cost to the right class and start depreciation from that date.

## Fixed asset disposals and the gain or loss check

A fixed asset disposal must remove the asset's cost and its accumulated depreciation from both the register and the ledger, and record any difference between proceeds and net book value as a gain or loss. A disposal that removes only the cost leaves accumulated depreciation stranded, and the net balance no longer describes anything the company owns.

Here is a worked example. The figures are examples. A delivery van with a cost of 22,000.00 and accumulated depreciation of 19,800.00 is sold for 3,000.00.

| Step | Amount |
| --- | --- |
| Cost removed | 22,000.00 |
| Accumulated depreciation removed | (19,800.00) |
| Net book value at sale | 2,200.00 |
| Proceeds received | 3,000.00 |
| **Gain on disposal** | **800.00** |

The entry debits cash 3,000.00 and accumulated depreciation 19,800.00, credits vehicles 22,000.00, and credits gain on disposal 800.00. Check the proceeds against the bank deposit, not just the bill of sale.

### Disposals nobody recorded

The hardest disposals to catch are the ones that leave no paperwork: equipment scrapped, stolen or traded in. Ask department heads each quarter what left the building. A trade-in deserves special attention, because the old asset's value is often netted into the price of the new one and never removed from the register.

Assets also move between companies in the same group. A transfer is a disposal in one entity and an addition in the other, and the two must match. The [intercompany reconciliation template](/blog/intercompany-reconciliation-template) covers how both sides are compared before consolidation.

## Accumulated depreciation rollforward for the fixed asset register

An accumulated depreciation rollforward starts with the opening balance, adds the period's depreciation charge, subtracts the depreciation on disposed assets, and arrives at the closing balance. The depreciation added must also equal depreciation expense in the income statement. Running the cost and accumulated depreciation rollforwards side by side proves the whole account.

A full-year example, with example values:

| Line | Cost | Accumulated depreciation |
| --- | --- | --- |
| Opening balance, January 1 | 480,000.00 | 210,000.00 |
| Additions | 36,500.00 | |
| Depreciation charge for the year | | 52,300.00 |
| Disposal of delivery van | (22,000.00) | (19,800.00) |
| **Closing balance, December 31** | **494,500.00** | **242,500.00** |
| Ledger balance | 494,500.00 | 242,500.00 |
| Difference | 0.00 | 0.00 |

Net book value at year end is 252,000.00, and it should match the register's net book value column total.

### Recomputing the charge

Pick a handful of assets and recompute their depreciation from cost, life and method. A new asset depreciated for a full year when it went into service in November is a common error. So is an asset that keeps depreciating after it reached zero book value, which pushes accumulated depreciation above cost for that item. Add a check column in the register that flags any asset where accumulated depreciation exceeds cost.

### Book and tax registers

Many companies keep two depreciation figures for each asset: one for the financial statements and one for the tax return, because tax methods often release cost faster. Reconcile each register to its own ledger or tax schedule, and never mix the two in one column. A reviewer who sees tax depreciation in the book register will find that the expense and the accumulated depreciation no longer agree with the income statement.

## How often should a physical fixed asset spot check happen?

A physical fixed asset spot check should happen at least once a year, and more often for portable, high-value or easily stolen items such as laptops, tools and vehicles. The check samples assets in both directions: from the register to the floor to prove existence, and from the floor to the register to prove completeness.

### Running the spot check

1. **Register to floor.** Pick a sample from the register, weighted toward high-value and portable items. Find each one by tag and location, and note its condition.
2. **Floor to register.** Walk an area, pick items you see, and find them on the register. Anything missing is an unrecorded addition or an asset expensed in error.
3. **Record exceptions.** For every asset not found, decide whether it was disposed of, moved or lost, and book the disposal if it is gone.
4. **Update locations.** Assets move. Correct the register while you are standing there.

A checklist with columns for tag number, expected location, found location, condition and the person who checked keeps the evidence tidy for the file.

Cash proceeds from assets sold during the year can also go astray. A buyer's check that was voided and reissued, for example, can leave the original deposit on the books and the new one missing. The [voided check bank reconciliation guide](/blog/voided-check-bank-reconciliation) shows how each case appears.

## Fixed asset edge case: fully depreciated equipment still in use

Fully depreciated equipment still in use stays on the register at its original cost and an equal amount of accumulated depreciation, with a net book value of zero. Removing it would understate both totals and lose track of an asset the company still owns, insures and may eventually sell.

Keep such assets on the register until they are actually disposed of. When they are, the disposal removes cost and accumulated depreciation in equal amounts, and any sale price becomes a gain.

### When to write them off

A register full of old, zero-value lines is hard to count. Once a year, use the spot check to find assets that no longer exist, and record their disposal. For equipment that still exists but is unused, note its status. The proceeds from any sale should be traced to the bank account, where [PreciseBankFlow](/) matches deposits on the statement to your ledger and lists the ones that do not match. It is in early access, and decisions about each asset remain yours.