Fixed Assets Policy

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

1. Introduction and Purpose

This policy outlines the procedures for the acquisition, recording, safeguarding, depreciation, and disposal of fixed assets within {{company_name}}. The purpose of this policy is to ensure compliance with International Financial Reporting Standards (IFRS) and relevant national accounting standards, maintain accurate financial records, and protect the company's investments in fixed assets.

2. Scope

This policy applies to all employees, departments, and operations of {{company_name}} that are involved in the management of fixed assets. Fixed assets include, but are not limited to, land, buildings, machinery, equipment, vehicles, and furniture.

3. Definitions

**Fixed Asset:** A tangible asset with a useful life exceeding one year that is held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and is not intended for sale in the ordinary course of business.

**Capitalization Threshold:** The minimum cost at which an asset is recognized as a fixed asset and capitalized on the balance sheet, rather than expensed in the period of acquisition. The current capitalization threshold for {{company_name}} is {{capitalization_threshold}} {{currency}}.

**Depreciation:** The systematic allocation of the depreciable amount of an asset over its useful life.

4. Acquisition of Fixed Assets

All acquisitions of fixed assets must be approved according to the company's delegated authority matrix. A purchase requisition must be raised and approved before any commitment is made. Upon receipt, assets must be inspected, tagged with a unique asset number, and registered in the fixed asset register.

Supporting documentation, such as invoices, delivery notes, and purchase orders, must be retained for all asset acquisitions.

5. Fixed Asset Register

A comprehensive fixed asset register will be maintained by the {{department_responsible}} department. The register will include the following information for each asset:

* Asset description and unique asset number

* Date of acquisition

* Original cost

* Location

* Useful life and depreciation method

* Accumulated depreciation

* Net book value

* Disposal date (if applicable)

6. Depreciation Policy

Depreciation will be calculated using the {{depreciation_method}} method over the estimated useful life of the asset. The useful lives of different asset categories are as follows:

* Buildings: {{useful_life_buildings}} years

* Machinery and Equipment: {{useful_life_machinery}} years

* Vehicles: {{useful_life_vehicles}} years

* Furniture and Fittings: {{useful_life_furniture}} years

The residual value of assets will be reviewed annually. Depreciation will commence when the asset is available for use and cease at the earlier of the date the asset is classified as held for sale or the date it is derecognized.

7. Impairment of Assets

At each reporting date, the company will assess whether there is any indication that an asset may be impaired. If any such indication exists, the company will estimate the asset's recoverable amount. An impairment loss is recognized immediately in profit or loss when the carrying amount of an asset exceeds its recoverable amount.

8. Disposal of Fixed Assets

Fixed assets no longer required for operations must be disposed of in a manner that maximizes value for the company and minimizes legal and environmental risks. All disposals must be approved by the {{approval_authority}} and documented appropriately. The asset must be removed from the fixed asset register, and any gain or loss on disposal recognized in the income statement.

9. Physical Verification

A physical verification of all fixed assets will be conducted at least {{frequency_of_verification}} to ensure the accuracy of the fixed asset register and to identify any discrepancies or obsolete assets. Any discrepancies found during the verification process will be investigated and reconciled promptly.

10. Review and Amendment of Policy

This policy will be reviewed annually by the {{review_department}} to ensure its continued relevance and effectiveness. Any amendments to this policy will be approved by the {{amendment_approver}}.

Signature Block

_________________________

{{name_of_approver}}

{{title_of_approver}}

{{date}}