Fixed Asset Register Verification: What It Is and When You Need It
By Harihar S, Chartered Engineer & IBBI Registered Valuer
What Is a Fixed Asset Register (FAR)?
A Fixed Asset Register is the accounting record a company maintains of its property, plant and equipment: land, buildings, plant, machinery, vehicles, furniture and other fixed assets, along with acquisition cost, location, useful life, depreciation and net book value. Companies are required to maintain and periodically update this register under the Companies Act 2013. FAR verification is the exercise of confirming that what the register says exists actually does, on the ground, in the condition and location recorded.
What Triggers a Fixed Asset Register Verification?
Under CARO 2020 (the Companies (Auditor's Report) Order), statutory auditors must report whether the company has a program for physical verification of property, plant and equipment at reasonable intervals, and whether any material discrepancies were noticed and properly dealt with in the books. Beyond the statutory audit trigger, FAR verification is commonly commissioned for secured lending, where banks and NBFCs confirm that pledged or hypothecated assets actually exist and match the records before disbursement or renewal, for insurance, confirming sums insured against actual assets, for M&A due diligence, where an acquirer confirms a target's fixed asset base is real and complete, and for IBBI resolution or liquidation proceedings, confirming the corporate debtor's asset base. See our page on fixed asset valuation for more.
What Does a Fixed Asset Register Verification Involve?
The exercise involves physically inspecting each asset against its line item in the FAR: confirming existence, location, identification (asset tagging or serial numbers where applicable), and condition, and reconciling any assets found on-site but not in the register, or listed in the register but not found on-site. Because this spans both the land and buildings the assets sit on and the plant and machinery itself, Axium's combined IBBI registration, covering Land & Building and Plant & Machinery, means one engagement can cover the complete asset base rather than requiring separate specialists for each class. See our pages on Real Estate & Infrastructure valuation and Plant, Machinery & Equipment valuation for more.
Why Axium Valuation
Axium Valuation Services LLP is an IBBI registered valuer with 15+ years of experience in physical asset verification and valuation across the Land & Building and Plant & Machinery asset classes.
Frequently asked questions
Is Fixed Asset Register verification a valuation, or something different?
It's related but distinct. FAR verification confirms an asset physically exists, in the stated location and condition, and reconciles it against the accounting record. A valuation goes further, assigning a fair value. Many engagements combine both in a single assignment.
What triggers a Fixed Asset Register verification in India?
Most commonly the CARO 2020 statutory audit requirement for physical verification of property, plant and equipment, secured lending by banks and NBFCs, insurance sum-insured confirmation, M&A due diligence, and IBBI resolution or liquidation proceedings.
Is Fixed Asset Register verification covered under Axium's IBBI registration?
Yes, under both the Land & Building and Plant & Machinery asset classes of IBBI Entity Registration IBBI/RV-E/04/2021/144.
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