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Prepare your fixed assets for an audit with this handy checklist

by , 25 August 2014
When SARS audits your company, it'll go through every record, document and asset. That's why you need to ensure all your documents are in place and ready just in case a SARS auditor pitches up at your workplace.

This applies to your fixed assets as much as your financial ones. The reason for this is you claim deductions on the condition and life span of these items. As such, SARS wants to ensure you didn't claim for something you didn't deserve.

Here's the checklist that'll help you get all the records and documents relating to your fixed assets in order...

Use this checklist to get your fixed assets and records in order

You'll need:
 
- The fixed asset register at year-end that you reconciled to your general ledger. It must contain this information:
 
A description of the asset. (Include its serial numbers, registration numbers, bar codes etc.)
 
Date of acquisition additions, disposals and transfers during the period under review. (Include copies of supporting documentation for all additions and authorisation for disposal, i.e. minutes of directors' meeting.)
 
An assessment by management of the useful life of the asset.
 
An assessment by management of what the asset's estimated residual value is at the end of its useful life
 
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- A copy of the company's current insurance contracts (short-term cover and life assurance).
 
- List of all the assets you have under a finance lease and instalment sale, including the liability's account number.
 
- Schedule of future lease commitments, including those:
 
Payable in one year;
Payable in two to five years; and
Payable after five years.
 
- Access to all lease agreements such as those for your premises and equipment.
 
Follow this checklist and you can ensure you have all the right documents ready and waiting when that SARS auditor rocks up.
 

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