Assets & Maintenance

The Asset Register

The register is the list of what the business owns and cares about — plant, vehicles, IT equipment, tooling, fixtures.

What an asset carries

• Asset number — allocate it with a number scheme rather than typing it.
• Entity — which legal company owns it, which determines whose books the depreciation reaches.
• Class — the grouping that usually drives the depreciation method and useful life.
• Item reference — a link to the product record where the asset is something you also sell or stock.
• Location and custodian — where it is and who holds it.
• Acquisition date, cost and currency — the basis for everything financial that follows.

Get acquisition data right at entry

Acquisition cost and date drive every depreciation calculation. Because depreciation is written per period rather than recalculated on demand, correcting an acquisition cost after periods have been posted does not retrospectively fix them — you are left reconciling posted figures against a basis that has changed. Enter it correctly, and verify before the first depreciation run.

Custodian and location

These are the fields that make a register useful operationally rather than only financially. An annual verification asks a custodian to confirm they still hold what the register says, and that is only possible if somebody is named.

Keep them current when equipment moves. A register nobody updates becomes a list of things you used to own.

Classes

Keep classes aligned to how your accountants group assets, because that is what the depreciation policy attaches to. Resist a class per asset type; the register is not the place to model your product hierarchy.

Disposals

Record disposal rather than deleting the asset. The history — what it cost, what it depreciated, what it sold for, and the resulting gain or loss — is exactly what the accounts need at year end. A deleted asset takes all of that with it.

Meters and Preventive Maintenance

Meters record usage — hours run, miles driven, copies produced, cycles completed. They drive usage-based maintenance and, where relevant, usage-based depreciation.

Rollover is handled

Meters wrap. A five-digit hour meter goes from 99999 to 0, and a naive system reads that as negative usage of 99999 hours. Rollover is handled explicitly, so a wrapped reading is interpreted as continued usage rather than as an impossible correction.

You do not need to do anything for this beyond recording readings honestly, including the one after the wrap.

Recording readings

Readings are dated observations, not a current value that gets overwritten. Keeping the history is what lets you see usage rate over time, which is what makes a usage-based schedule predictable rather than reactive.

Record readings at a regular cadence. Sporadic readings make the interval between services a guess.

Preventive maintenance

A maintenance schedule says what should be done and how often, in one of two ways:

• By elapsed time — every six months, regardless of use. Right for things that degrade whether used or not, and for statutory inspections.
• By usage — every 500 hours or 10,000 miles. Right for wear-driven servicing.

Many assets need both, whichever falls first. A vehicle serviced every 10,000 miles or twelve months should not go three years because it was little used.

Due and overdue

The schedule combined with readings is what produces a due list. Review it as a forward plan, not as an overdue report — the point of preventive maintenance is to act before failure, and a list you only look at when something breaks is a maintenance log rather than a schedule.

Connect maintenance to time and stock

Where maintenance is carried out in-house, book time against the asset and issue parts from stock against the same job. That gives you the real cost of ownership, which is the figure that informs whether to keep repairing or replace.

Depreciation

Depreciation spreads an asset's cost across its useful life. The important design decision is that it is written for each period, not recomputed whenever somebody looks.

Why written, not recomputed

If depreciation were calculated on read, then editing a useful life or a residual value would restate every period already reported. Somebody adjusting an estimate in October would change what was reported in March, without intending to and without anyone noticing.

Writing the charge per period means posted figures stay posted. A change to an estimate affects future periods, which is also how accounting standards expect a change in estimate to be treated.

Re-running a period is refused

Running depreciation for a period that has already been run is rejected rather than silently doubling the charge. Depreciation runs are usually scheduled, and a scheduled job that runs twice because of a retry or an overlap is not unusual — refusing the second run is what makes the schedule safe.

If a period genuinely needs correcting, the answer is an adjusting posting, visible as such.

Setting up

Depreciation needs the method, the useful life and any residual value, usually held at class level so a policy is applied consistently rather than decided per asset.

Running it

Run depreciation as part of period close, before closing. The charge posts to the ledger like any other journal, so it appears in the period's figures and in the trial balance you review before closing.

Assets acquired mid-period

Decide your convention — full period in the month of acquisition, pro-rata by days, or none until the following period — and apply it consistently. Any of them is defensible; changing between them is not.

Checking

Reconcile accumulated depreciation to the register periodically. A divergence usually means an asset was added with a wrong acquisition date, or a disposal was recorded without stopping the depreciation.