Meaning
Legal records provide a comprehensive list of all fixed assets owned by a company as required by national laws and accounting standards. A statutory asset register contains the purchase date, cost, location and current value for every piece of equipment. This document is a primary source for the financial statements and the corporate tax return.
It stops at the boundary of physical ownership and does not include leased items that are not capitalized on the balance sheet.
Ownership Verification
Proving the existence and location of physical property is a basic requirement for any annual audit. The statutory asset register links the financial figures on the balance sheet to the actual machines on the factory floor. It must be updated every time an asset is bought, sold or scrapped.
This reconciliation prevents the company from paying taxes or insurance on equipment that is no longer in service.
Valuation Accuracy
Calculating the correct depreciation for each item requires a precise history of its use and any impairments. In a statutory asset register, the carrying value of an asset is adjusted to reflect its wear and tear over time. This ensures that the company’s wealth is not overstated.
Insurance Support
Providing a detailed list of assets to an insurance provider helps in securing the correct level of coverage. The statutory asset register is the first place a company looks when filing a claim for damaged or stolen equipment.
