Fixed Assets Register – What Is It and How to Maintain It?

Every company owns assets. It is worth noting that a key element of almost every business is the meticulous and accurate documentation of its asset components. The fixed assets register is one of the methods used for this purpose. Below, we have gathered all the information that will help you understand what the fixed assets register is. In this article, you will learn how to maintain it properly. We will also address questions about the appearance of the fixed assets register, what should be recorded, and how to fill it out correctly.

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What Is the Fixed Assets Register?

First, let’s start with the question: what is the fixed assets register? Primarily, the fixed assets register is a list of all company assets connected with business operations. Therefore, the register must be maintained by every entrepreneur who keeps a revenue and expense ledger and uses fixed assets in their business activity. The registration of purchased fixed assets, as well as intangible assets, is regulated by law.

To better understand the topic, it is important to answer the question: what is the fixed assets register and what do we include in it? According to the Regulation of the Minister of Finance, the register must include intangible fixed assets exceeding PLN 10,000 net for active VAT payers, and PLN 10,000 gross for those exempt from VAT. Furthermore, to classify a property as a fixed asset, the duration of its use is very important—it should be longer than one year.

When Must the Fixed Assets Register Be Maintained?

Entrepreneurs who keep their accounts using the revenue and expense ledger or lump-sum tax settlement are obligated to maintain a fixed assets register. This obligation is regulated by the Regulation of the Minister of Finance on maintaining the tax revenue and expense ledger, dated December 23, 2019.

It is worth adding that the fixed assets register allows for the correct accounting of depreciation as a business expense. On the other hand, if fixed assets are not properly recorded, depreciation write-offs cannot be recognized as tax-deductible costs. When the fixed assets register is correctly maintained, depreciation can be included in the costs related to running a business.

‍Who Must Maintain the Fixed Assets Register?

According to the law, maintaining the fixed assets register aims to increase control over the purchase of fixed assets as well as intangible assets used in running a business. When talking with various companies, a common question arises: who maintains the fixed assets register in your company? This topic is also addressed in relevant regulations.

Specifically, these regulations state that maintaining such accounting records, including the register of intangible assets, is part of the accounting responsibilities of the entity. Inventory books in a company are most often maintained by the chief accountant. For example, in a school or educational institution, the fixed assets register is usually the responsibility of the principal or director.

How to Maintain the Fixed Assets Register

The fixed assets register should be kept in a permanently documented form so that the people managing the assets have quick access to the information relevant to them. When it comes to precisely defining how to maintain the fixed assets register, it is worth examining what the register should contain.

First and foremost, every taxpayer must ensure that the fixed assets register meets the formal requirements specified in Article 22n of the Personal Income Tax Act (PIT). The legislator does not impose a strict method for recording assets, but dedicated inventory software is increasingly being used for this purpose.

‍What Should the Fixed Assets Register Contain?

There is no single prescribed template for documenting the fixed assets register. The most important thing is to follow the rules and principles that apply to fixed assets documentation, and to include all the necessary elements and information about each recorded fixed asset.

As mentioned above, IT systems can be used to facilitate this task. Therefore, the fixed assets register can be maintained either in paper form or electronically, and every entrepreneur has full freedom in this regard.

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‍What Must the Fixed Assets Register Contain?

To ensure the fixed assets register is maintained correctly and in accordance with applicable law, the opening balance must include the most important information regarding each fixed asset. These should include at least:

• initial quantity,
• date of acquisition,
• date the fixed asset was put into use,
• document confirming the acquisition of the fixed asset,
• description of the fixed asset or intangible asset,
• KŚT code (Classification of Fixed Assets),
• initial value,
• depreciation rate,
• amount of depreciation write-off for the given tax year,
• updated initial value,
• updated amount of depreciation write-offs,
• value of improvements increasing the initial value,
• date and reason for liquidation of the asset or date of disposal.

It is important to emphasize that these entries must be made in the register no later than the month in which the fixed asset was put into use. The date of acquisition does not have to be the same as the date the asset was put into use.

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What Should the Fixed Assets Register Look Like?

It is important to emphasize once again that entrepreneurs decide on the form of documentation related to the fixed assets register. However, many still lack full knowledge of how to do this correctly, as inspections by the Supreme Audit Office (Najwyższa Izba Kontroli, NIK) conducted in public institutions continue to reveal significant irregularities in asset recordkeeping.

Information on how the fixed assets register should look, as well as the most common mistakes made in asset registration, can be found in NIK’s audit reports. An analysis of these results, along with recommendations included in the Regulation of the Minister of Finance on maintaining the revenue register and the list of fixed assets and intangible assets, has enabled us to develop an appropriate fixed assets register template, which is provided below.

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