# Fixed Asset Register and Policy: [Entity or group] [Financial year]

> Fixed asset register with the policy that drives it: capitalisation
> threshold, asset classes and useful lives, depreciation methods,
> additions and construction in progress, disposals, the monthly
> depreciation run and roll-forward, physical verification, impairment
> indicators, statutory and tax differences and the reconciliation to
> the general ledger. It is built for property, plant and equipment
> under IAS 16 Property, Plant and Equipment (IFRS) or FASB ASC Topic
> 360 (US GAAP), cited by name and number only, and includes a Vietnam
> statutory column for the fixed asset regime of Circular 45/2013/TT-BTC
> (as amended) with accounting under Circular 99/2025/TT-BTC (status as
> of 2026-10; check local law). Obtain the standard or law for the
> normative text. Replace every `[bracketed]` value and every row marked
> *Example*. This is a document format, not accounting, tax, audit or
> legal advice.

<!--
Guidance: How to use this template
- Purpose: one policy section that the board or CFO approves once, and
  one register that finance maintains every month. Auditors test the
  register against the policy, the ledger and the assets on the floor.
- Fill section 2 (policy) and section 3 (classes and lives) first. Then
  set up the register columns (section 5), load the opening balances
  and reconcile them to the ledger (section 10) before the first
  monthly run.
- The worked example uses the fictional Corvid Commerce Group (parent
  Corvid Commerce Group plc, England and Wales, listed in London and,
  through American Depositary Shares, in New York; consolidated
  statements under UK-adopted international accounting standards and
  IFRS as issued by the IASB; presentation currency EUR, calendar
  financial year, entities CC-HOLD, CC-DE, CC-UK, CC-US and CC-VN). The register extract
  in section 6 is in EUR (not thousands) and shows six assets only.
- Scope boundary: right-of-use assets under IFRS 16 sit in a lease
  register (Lease Accounting Memo, `finance/lease-accounting-memo`);
  intangible assets and capitalised development follow IAS 38 and are
  tracked in an intangibles register that can reuse this layout.
- Related documents: Capex Request (`finance/capex-request`),
  Impairment Test Memo (`finance/impairment-test-memo`), Month-End Close
  Checklist (`finance/month-end-close-checklist`), Account
  Reconciliation (`finance/account-reconciliation`), Accounting Policy
  Manual (`finance/accounting-policy-manual`), Income Tax Provision
  (`finance/income-tax-provision`).
- Common pitfall: a register that does not tie to the ledger, or assets
  in the register that nobody can find. Both are found at every audit.
-->

## Document control

<!-- Guidance: Record scope, framework and the date the policy was approved. The owner is normally the financial controller; the policy approver is the CFO or the audit committee. -->

| Field | Value |
|---|---|
| Document ID | [FAR-YYYY] *Example:* FAR-2026 |
| Version | [0.1] |
| Status | [Draft / In review / Approved / Superseded] |
| Owner | [@financial-controller] |
| Approvers/reviewers | [@cfo], [@group-reporting-lead] |
| Last updated | YYYY-MM-DD |
| Classification | [Internal] |
| Scope | [Entities and asset classes] *Example:* CC-HOLD, CC-DE, CC-UK, CC-US, CC-VN; property, plant and equipment owned |
| Reporting framework | [UK-adopted IAS / IFRS as adopted by the EU / IFRS as issued by the IASB / US GAAP / local GAAP] *Example:* UK-adopted international accounting standards and IFRS as issued by the IASB (group); local statutory GAAP per entity (CC-DE: HGB; CC-VN: Vietnamese Accounting Standards) |
| Measurement model | [Cost model / revaluation model by class] *Example:* Cost model for all classes |
| Fixed asset system | [ERP module or tool] |
| Policy approved on | YYYY-MM-DD |
| Last physical verification | YYYY-MM-DD |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Financial controller | [Name] | [Prepared] | YYYY-MM-DD |
| Chief financial officer | [Name] | [Approved policy] | YYYY-MM-DD |
| Audit committee chair | [Name] | [Noted] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@author] | Initial policy and register |
| 1.0 | YYYY-MM-DD | [@author] | Approved; useful lives reviewed for FY[YYYY] |

## Contents

1. [1. Purpose, scope and framework](#1-purpose-scope-and-framework)
2. [2. Capitalisation policy](#2-capitalisation-policy)
3. [3. Asset classes and useful lives](#3-asset-classes-and-useful-lives)
4. [4. Depreciation methods and conventions](#4-depreciation-methods-and-conventions)
5. [5. Register structure](#5-register-structure)
6. [6. Register extract](#6-register-extract)
7. [7. Additions and construction in progress](#7-additions-and-construction-in-progress)
8. [8. Disposals, write-offs and transfers](#8-disposals-write-offs-and-transfers)
9. [9. Monthly depreciation run](#9-monthly-depreciation-run)
10. [10. Roll-forward and reconciliation to the ledger](#10-roll-forward-and-reconciliation-to-the-ledger)
11. [11. Physical verification](#11-physical-verification)
12. [12. Impairment indicators](#12-impairment-indicators)
13. [13. Statutory and tax differences](#13-statutory-and-tax-differences)
14. [14. Controls](#14-controls)
15. [15. Glossary and references](#15-glossary-and-references)

## 1. Purpose, scope and framework

<!-- Guidance: State which assets are in scope, which framework applies to each set of books, and where the tax rules differ. Pitfall: one register trying to serve group IFRS, local statutory and tax depreciation without separate books, so nobody can tell which number is which. -->

The fixed asset register is the subsidiary ledger that supports the property,
plant and equipment balance in the financial statements. It lists each asset or
group of assets with enough information to calculate depreciation, locate the
asset, prove ownership, and account for disposal. The policy in sections 2 to 4
sets the rules the register applies, so that similar assets are treated the same
way in every entity and every year.

Keep separate depreciation books where the rules differ. A common setup is one
group book under the group framework, one local statutory book per entity where
local GAAP differs, and one tax book per jurisdiction. Each book has its own
useful life, method and convention fields, while the asset master data (tag,
description, location, cost, acquisition date) is shared. Differences between
the group book and the tax book drive deferred tax, which the income tax
provision picks up.

| Book | Framework (as of 2026-10; check local law) | Entities *Example* |
|---|---|---|
| GROUP | IAS 16 (cost model), IAS 36 for impairment, IFRS 5 for assets held for sale (names only) | All |
| STAT-DE | German commercial code (HGB) rules for the statutory accounts | CC-DE |
| STAT-UK | FRS 102 or IFRS, depending on the entity's choice | CC-UK |
| STAT-VN | Vietnamese Accounting Standards with Circular 99/2025/TT-BTC (from 2026-01-01); fixed asset management and depreciation under Circular 45/2013/TT-BTC as amended | CC-VN |
| TAX-US | Internal Revenue Code section 168 (MACRS and bonus depreciation; check the current rate) | CC-US |
| TAX-DE, TAX-UK, TAX-VN | Local tax depreciation or capital allowance rules | CC-DE, CC-UK, CC-VN |

Vietnam status note, as of 2026-10: Ministry of Finance Decision 1760/QD-BTC of
2026-07-01 announced that Circular 45/2013/TT-BTC (as amended, most recently by
Circular 30/2025/TT-BTC, and corrected by Decisions 1173/QD-BTC and
3165/QD-BTC) continues to apply until
replaced, and at the latest until 2026-12-31. A replacement circular was in
public consultation in October 2026. Check the official gazette before closing
FY2026 and before setting FY2027 policy for CC-VN.

## 2. Capitalisation policy

<!-- Guidance: Set a group threshold, explain what is capitalised and what is expensed, and when to split an asset into components. Pitfall: a threshold so low that the register fills with keyboards, or so high that material spend is expensed and capital expenditure is misreported. -->

Capitalise an item as property, plant and equipment when it meets the
recognition criteria of IAS 16 (paragraph 7) and its cost is at or above the
capitalisation threshold for its class. Expense items below the threshold,
unless they are bought as a group for a single project (for example a full
laptop refresh or a warehouse racking system), in which case capitalise the
group as one asset or as a pooled asset.

| Policy point | Group policy *Example* | Notes |
|---|---|---|
| Group capitalisation threshold | EUR 2,500 per item or per group bought for one project | Below threshold: expense through operating cost |
| Local statutory threshold, CC-VN | VND 30 million and useful life of more than one year, as set by Circular 45/2013/TT-BTC (check current text) | Items below the local threshold are tools and supplies, allocated over up to three years under local practice |
| Costs included | Purchase price after discounts, import duties and non-refundable taxes, delivery, installation, site preparation, professional fees, testing | Read IAS 16 paragraphs 16 to 22 for the cost elements |
| Costs excluded | Training, relocation, administration overheads, costs of opening a new site, operating losses during ramp-up | Expense as incurred |
| Borrowing costs | Capitalise on qualifying assets under IAS 23 | Rarely relevant for Corvid; none in FY2026 |
| Decommissioning | Include the estimate of dismantling and restoration costs where an obligation exists | Recognised with a provision under IAS 37 |
| Components | Depreciate separately each part with a significant cost and a different useful life | IAS 16 paragraph 43; for example the roof and the structure of a building |
| Subsequent expenditure | Capitalise replacements of components and upgrades that meet recognition; expense day-to-day servicing | Derecognise the replaced component |
| Spare parts | Capitalise major spares expected to be used over more than one period | Otherwise inventory |
| Capital expenditure approval | Every addition above EUR 25,000 has an approved capex request | See `finance/capex-request` |

Decide whether a cost creates a new asset, extends an existing one or is a
repair. A repair restores the asset to its original condition and is expensed.
An upgrade adds capacity, extends the useful life or improves output and is
capitalised. When in doubt, document the reasoning on the purchase order or in
the technical accounting memo, so that the next person makes the same choice.

Software needs extra care. Licence fees for software that runs only on a
specific item of hardware (for example a warehouse controller) are part of that
asset. Separately licensed software, cloud computing arrangements and internally
developed platform features are intangible assets or service costs and belong in
a separate register.

## 3. Asset classes and useful lives

<!-- Guidance: Use classes that match the note in the financial statements and the general ledger accounts. Set lives from your own experience of how long assets are used, not from tax tables. Pitfall: lives copied from tax rules, which then differ from economic use and create systematic gains or losses on disposal. -->

| Class code | Class | GL cost / accumulated depreciation accounts *Example* | Useful life (group) | Method | Residual value | Vietnam statutory frame (Circular 45 Appendix I, check) |
|---|---|---|---|---|---|---|
| LAND | Freehold land | 1100 / n/a | Not depreciated | n/a | n/a | Land use rights are intangible in Vietnam |
| BLDG | Buildings | 1110 / 1119 | 30 to 40 years | Straight-line | Nil | Within the statutory frame for buildings |
| LHI | Leasehold improvements | 1120 / 1129 | Shorter of 8 years and the remaining lease term | Straight-line | Nil | Per lease term |
| WHSE | Warehouse equipment and racking | 1130 / 1139 | 10 years | Straight-line | Up to 5% of cost | Within the statutory frame |
| IT-SRV | Servers and network equipment | 1140 / 1149 | 5 years | Straight-line | Nil | Within the statutory frame |
| IT-EUD | Laptops and end-user devices | 1150 / 1159 | 3 years | Straight-line | Nil | Within the statutory frame |
| POS | Point-of-sale terminals owned by the group and rented to subscription customers (operating leases as lessor; reported in Scope 3 category 13, downstream leased assets) | 1160 / 1169 | 4 years | Straight-line | Nil | Within the statutory frame |
| VEH | Vehicles | 1170 / 1179 | 5 years | Straight-line | 20% of cost | Within the statutory frame |
| FFE | Furniture and office equipment | 1180 / 1189 | 7 years | Straight-line | Nil | Within the statutory frame |
| CIP | Construction in progress | 1190 / n/a | Not depreciated until available for use | n/a | n/a | Account 241 under Circular 99 (check) |

Review the useful life and residual value of every class at least at each
financial year-end, as IAS 16 paragraph 51 requires a review, and treat any
change as a change in accounting estimate applied prospectively. Record the
review with evidence: actual retirement ages of the last batch of disposals,
technology roadmaps for IT equipment, and maintenance reports for warehouse
equipment. If the review shows assets regularly used beyond their life (fully
depreciated assets still in use), lives are too short. If disposals regularly
show losses, lives are too long or residual values too high.

For CC-VN, the statutory book must keep each asset's life within the minimum and
maximum years that the Circular 45 appendix sets for its group and register the
chosen method with the tax authority under the current procedure. The group book
can use a different life, and the difference is a reconciling item between the
statutory and group accounts.

## 4. Depreciation methods and conventions

<!-- Guidance: Choose a method that reflects how the asset's economic benefits are used. Write down the convention for part months. Pitfall: different conventions in different entities, which make the same asset depreciate differently in the group book. -->

Depreciation starts when the asset is available for use, meaning it is in the
location and condition needed to operate as management intends, not when it is
purchased or first used at full capacity. It stops at the earlier of
derecognition and classification as held for sale. It does not stop when an
asset is idle, unless it is fully depreciated or the units-of-production method
gives a nil charge.

Review the depreciation method at least at each year-end (IAS 16 paragraph 61)
and change it only if the pattern of consumption has changed; a method change is
a change in estimate.

**Straight-line** (default for Corvid):

$$
D_{\text{annual}} = \frac{C - R}{n}
$$

where $C$ is cost, $R$ is residual value and $n$ is the useful life in years.
The monthly charge is $D_{\text{annual}} / 12$.

**Units of production** (used for assets whose wear follows output, for example
a parcel sorter):

$$
D_t = (C - R) \times \frac{u_t}{U}
$$

where $u_t$ is units produced in the period and $U$ is total expected units over
the life.

**Declining balance with adjustment** (allowed in the Vietnam statutory book
under Circular 45 for qualifying new assets; check the conditions): the rate is
the straight-line rate multiplied by a coefficient that depends on useful life
(1.5 for up to 4 years, 2.0 for more than 4 and up to 6 years, 2.5 for more than
6 years), and the method switches to straight-line over the remaining years once
that gives a higher charge.

*Example (Vietnam statutory book, VND million):* a new packing line costs 600,
useful life 5 years, so the straight-line rate is 20% and the adjusted rate is
20% x 2.0 = 40%.

| Year | Opening NBV | Declining balance charge (40%) | Straight-line on remaining years | Charge used | Closing NBV |
|---|---|---|---|---|---|
| 1 *(Example)* | 600.0 | 240.0 | 600.0 / 5 = 120.0 | 240.0 | 360.0 |
| 2 *(Example)* | 360.0 | 144.0 | 360.0 / 4 = 90.0 | 144.0 | 216.0 |
| 3 *(Example)* | 216.0 | 86.4 | 216.0 / 3 = 72.0 | 86.4 | 129.6 |
| 4 *(Example)* | 129.6 | 51.8 | 129.6 / 2 = 64.8 | 64.8 | 64.8 |
| 5 *(Example)* | 64.8 | 25.9 | 64.8 / 1 = 64.8 | 64.8 | 0.0 |

Check: 240.0 + 144.0 + 86.4 + 64.8 + 64.8 = 600.0. In year 4 the declining
balance charge (51.8) falls below the straight-line charge on the remaining two
years (64.8), so the method switches.

| Convention | Group rule *Example* |
|---|---|
| Start month | Full month's charge in the month the asset becomes available for use, if that date is on or before the 15th; otherwise from the next month |
| Disposal month | Charge up to the end of the month before disposal if disposed on or before the 15th; otherwise including the disposal month |
| Rounding | Monthly charge rounded to the cent; the final month absorbs rounding so that NBV equals residual value |
| Currency | Depreciate in the functional currency of the owning entity; translate at average rate for the income statement and closing rate for the balance sheet |
| Changes in estimate | Remaining NBV less residual value spread over the remaining revised life from the month of the change |

For simplicity the register extract in section 6 places every asset in service
on the first day of a month.

## 5. Register structure

<!-- Guidance: Define every field once so that each entity fills the register the same way. Pitfall: free-text locations and descriptions that make physical verification impossible. -->

| Field | Content | Mandatory |
|---|---|---|
| Asset ID | FA-NNNN, unique across the group; CIP-NNNN for construction in progress | Yes |
| Tag number | Physical barcode or RFID tag fixed to the asset | Yes, where taggable |
| Description | Make, model and function in a standard format | Yes |
| Serial number | Manufacturer serial | Where available |
| Class code | From section 3 | Yes |
| Entity and cost centre | Owning legal entity and cost centre | Yes |
| Location | Site code and room or zone from a controlled list | Yes |
| Custodian | Named person responsible for the asset | Yes |
| Supplier and invoice | Supplier, invoice number and capex request ID | Yes |
| Acquisition date / available-for-use date | Two dates; depreciation runs from the second | Yes |
| Cost | Capitalised cost in functional currency | Yes |
| Residual value | From section 3 or asset-specific | Yes |
| Useful life and method | Per book | Yes |
| Accumulated depreciation and impairment | Per book, separately | Yes |
| Net book value | Cost less accumulated depreciation and impairment | Calculated |
| Status | Active, idle, held for sale, disposed, written off | Yes |
| Verification date and result | Last physical check | Yes |
| Encumbrance | Pledged as security, under a finance agreement | Where applicable |
| Insurance reference | Policy and insured value | Where applicable |

Group small identical items bought together under one asset ID with a quantity
field only if they share a date, life and location. Track anything that moves
between people or sites (laptops, scanners, vehicles) individually, because
pooled records cannot be verified.

## 6. Register extract

<!-- Guidance: Show a sample of real rows when reviewing the register; the full register lives in the fixed asset system. Recompute depreciation for a sample every quarter. Pitfall: accumulated depreciation imported from an old system without checking it against cost, life and dates. -->

Extract at 2026-12-31, group book, EUR. Straight-line, full month from the
in-service date.

| Asset ID | Description | Class | Entity | In service | Cost | Life (years) | Residual | Annual charge | FY2026 charge | Accumulated at 2026-12-31 | NBV at 2026-12-31 | Status |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FA-0001 *(Example)* | Server cluster, Frankfurt colocation | IT-SRV | CC-DE | 2025-07-01 | 480,000 | 5 | 0 | 96,000 | 96,000 | 144,000 | 336,000 | Active |
| FA-0002 *(Example)* | Racking system, Leipzig hall | WHSE | CC-DE | 2024-01-01 | 210,000 | 10 | 10,000 | 20,000 | 20,000 | 60,000 | 150,000 | Active |
| FA-0003 *(Example)* | Laptop batch (120 units), London | IT-EUD | CC-UK | 2026-04-01 | 96,000 | 3 | 0 | 32,000 | 24,000 | 24,000 | 72,000 | Active |
| FA-0004 *(Example)* | Office fit-out, Ho Chi Minh City | LHI | CC-VN | 2025-01-01 | 120,000 | 6 (lease term) | 0 | 20,000 | 20,000 | 40,000 | 80,000 | Active |
| FA-0005 *(Example)* | POS terminal fleet (500 units) | POS | CC-US | 2026-10-01 | 150,000 | 4 | 0 | 37,500 | 9,375 | 9,375 | 140,625 | Active |
| FA-0006 *(Example)* | Legacy servers | IT-SRV | CC-DE | 2021-10-01 | 60,000 | 5 | 0 | 12,000 | 6,000 | Disposed | Disposed | Disposed 2026-06-30 |
| **Total in use** | | | | | **1,056,000** | | | | **175,375** | **277,375** | **778,625** | |

Recomputation:

- FA-0001: (480,000 - 0) / 5 = 96,000 a year; 18 months from 2025-07-01
to 2026-12-31 gives 96,000 x 18 / 12 = 144,000; NBV 480,000 - 144,000 = 336,000.
- FA-0002: (210,000 - 10,000) / 10 = 20,000 a year; three years gives
60,000; NBV 150,000 (which still exceeds the residual value).
- FA-0003: 96,000 / 3 = 32,000 a year; nine months in 2026 gives 24,000.
- FA-0004: 120,000 / 6 = 20,000 a year; two years gives 40,000.
- FA-0005: 150,000 / 4 = 37,500 a year; three months gives 9,375.
- FA-0006: 60,000 / 5 = 12,000 a year (1,000 a month); six months in
2026 gives 6,000 (see section 8 for the disposal).
- Totals: cost 480,000 + 210,000 + 96,000 + 120,000 + 150,000 =
1,056,000; FY2026 charge 96,000 + 20,000 + 24,000 + 20,000 + 9,375 + 6,000 =
175,375; accumulated 144,000 + 60,000 + 24,000 + 40,000 + 9,375 = 277,375; NBV
1,056,000 - 277,375 = 778,625.

## 7. Additions and construction in progress

<!-- Guidance: Every addition traces to an approved capex request and an invoice. CIP is reviewed monthly so that finished projects start depreciating. Pitfall: CIP balances that sit for years because nobody signs off completion. -->

Record an addition when control of the asset passes, which is normally on
delivery, not on order or payment. Use the purchase order and the goods receipt
to match the invoice, and post to the asset class from the capex request. Where
a project builds or assembles an asset over several months, collect costs in
construction in progress and transfer to the right class on the date the asset
is available for use.

| CIP ID | Project | Capex request | Entity | Costs to 2026-12-31 (EUR) | Expected available for use | Status *Example* |
|---|---|---|---|---|---|---|
| CIP-0001 *(Example)* | Parcel sorter automation, Leipzig | CAPEX-2026-014 | CC-DE | 85,000 | 2027-03-01 | On plan; supplier acceptance test scheduled |
| CIP-0002 *(Example)* | Data centre rack expansion | CAPEX-2026-021 | CC-DE | 0 | 2027-06-01 | Approved, not started |

At each month-end, review every CIP project with its project manager: is the
asset ready for use, has spending exceeded the approved amount, and do any costs
fail the capitalisation criteria (for example training or testing costs after
the asset was ready). Transfer completed items in the same month, and expense or
write off costs of abandoned projects. A long-standing CIP balance with no
activity is also an impairment indicator (section 12).

## 8. Disposals, write-offs and transfers

<!-- Guidance: Require a signed disposal form for every sale, scrapping or loss, and remove the asset in the month it leaves. Pitfall: assets scrapped by operations and never removed from the register, which overstates assets and inflates depreciation. -->

Derecognise an asset on disposal, or when no future economic benefits are
expected from its use or disposal. Calculate the gain or loss as net disposal
proceeds less carrying amount, and present it in the income statement (not as
revenue).

| Disposal ID | Asset ID | Type | Date | Cost | Accumulated depreciation at date | Carrying amount | Net proceeds | Gain / (loss) | Approval |
|---|---|---|---|---|---|---|---|---|---|
| DSP-2026-001 *(Example)* | FA-0006 | Sale to IT recycler with certified data wiping | 2026-06-30 | 60,000 | 57,000 | 3,000 | 4,000 | 1,000 | Disposal form DF-2026-031 |

Check: FA-0006 was depreciated at 1,000 a month for 57 months from 2021-10-01 to
2026-06-30 (3 months in 2021, 48 months in 2022 to 2025, 6 months in 2026); 57 x
1,000 = 57,000. Carrying amount 60,000 - 57,000 = 3,000; gain 4,000 - 3,000 =
1,000.

Treat transfers between entities as a disposal by one entity and an acquisition
by the other, with intercompany pricing and, where relevant, transfer pricing
and customs documentation. Transfers between locations or cost centres within
one entity change only the master data, but still need a signed transfer note so
that the next physical verification finds the asset where the register says it
is.

For IT equipment, record certified data destruction before release. For assets
held for sale, stop depreciation and move them to the held for sale status only
when the IFRS 5 criteria are met; document the assessment.

## 9. Monthly depreciation run

<!-- Guidance: Run depreciation as a scheduled close task with a preview, review and posting step. Pitfall: posting the run before additions and disposals for the month are complete, which then needs manual corrections. -->

Run depreciation in the fixed asset system once a month, after additions, CIP
transfers and disposals for the month are posted.

1. Freeze asset master changes for the period (cut-off at WD+1).
2. Run a depreciation preview by book and entity.
3. Review the preview: compare the total with the prior month and with
the expected change from additions and disposals; investigate any asset whose
charge changed without a reason.
4. Post the run and confirm the journal reached the general ledger.
5. Reconcile the register to the ledger (section 10) and sign off.

| Analytical check | Expected | System preview | Difference | Explanation |
|---|---|---|---|---|
| December 2026 charge versus November 2026 *(Example)* | 17,125.01 (no additions or disposals in December) | 14,000.01 | (3,125.00) | FA-0005 missing from the run: available-for-use date not entered; corrected before posting |
| Charge versus annual budget / 12 *(Example)* | Within 5% | 2.1% above | n/a | Laptop batch FA-0003 bought earlier than budgeted |

Expected December charge for the five assets in use: 8,000.00 (FA-0001) +
1,666.67 (FA-0002) + 2,666.67 (FA-0003) + 1,666.67 (FA-0004) + 3,125.00
(FA-0005) = 17,125.01, which equals the annual charges of 205,500 divided by 12
(17,125.00) plus one cent of rounding that each asset's final month absorbs. The
preview of 14,000.01 is short by exactly the monthly charge of FA-0005, which
points straight to the cause. Never post a run with an unexplained difference; a
correction in a later month misstates both months.

## 10. Roll-forward and reconciliation to the ledger

<!-- Guidance: The roll-forward is both a control and the basis for the property, plant and equipment note. It must tie to the ledger to the cent. Pitfall: reconciling only the net book value, which hides offsetting errors in cost and accumulated depreciation. -->

Roll-forward for the register extract, FY2026, EUR:

| Line | Cost | Accumulated depreciation | Net book value |
|---|---|---|---|
| Opening balance 2026-01-01 *(Example)* | 870,000 | (159,000) | 711,000 |
| Additions (FA-0003, FA-0005) | 246,000 | 0 | 246,000 |
| Transfers from CIP | 0 | 0 | 0 |
| Disposals (FA-0006) | (60,000) | 57,000 | (3,000) |
| Depreciation charge | 0 | (175,375) | (175,375) |
| Impairment | 0 | 0 | 0 |
| Foreign exchange translation | 0 | 0 | 0 |
| **Closing balance 2026-12-31** | **1,056,000** | **(277,375)** | **778,625** |

Check: opening cost 480,000 + 210,000 + 120,000 + 60,000 = 870,000. Opening
accumulated depreciation at 2025-12-31: FA-0001 six months 48,000, FA-0002 two
years 40,000, FA-0004 one year 20,000, FA-0006 51 months 51,000; total 159,000.
Closing cost 870,000 + 246,000 - 60,000 = 1,056,000. Closing accumulated
depreciation 159,000 + 175,375 - 57,000 = 277,375. The foreign exchange line is
nil in the extract only because, for simplicity, the extract shows the CC-UK,
CC-US and CC-VN assets (FA-0003, FA-0005, FA-0004) at constant EUR
translation. In the real register those books are kept in GBP, USD and VND,
as section 4 requires: depreciate in the functional currency, translate cost
and accumulated depreciation at the closing rate, the charge at the average
rate, and show the translation difference on this line.

Add CIP (85,000 for CIP-0001) as a separate line or class so that total
property, plant and equipment in the ledger equals register NBV plus CIP.

| Reconciliation item | Register | General ledger | Difference | Action |
|---|---|---|---|---|
| Cost, all classes | 1,056,000 | 1,056,000 | 0 | None |
| Accumulated depreciation | (277,375) | (277,375) | 0 | None |
| CIP | 85,000 | 85,000 | 0 | None |
| Depreciation expense FY2026 | 175,375 | 175,375 | 0 | None |
| Gain on disposal FY2026 | 1,000 | 1,000 | 0 | None |

Use the full reconciliation format in Account Reconciliation
(`finance/account-reconciliation`) for the monthly sign-off.

## 11. Physical verification

<!-- Guidance: Verify every asset at least once a year, more often for portable and high-value items. Count from the floor to the register and from the register to the floor. Pitfall: counting only from the register, which never finds untagged assets that should be recorded. -->

Plan the count by site with a fixed date, a team that does not include the asset
custodians alone, and tag scanners loaded with the register for that site. Count
in both directions: register to floor (does every recorded asset exist, and is
it in use and in good condition) and floor to register (is every asset found on
site recorded and tagged). For remote staff equipment, use an attestation
process with photos of the tag and serial number.

```mermaid
flowchart LR
  A[Plan: sites, dates, teams] --> B[Load register extract to scanners]
  B --> C[Count: register to floor]
  B --> D[Count: floor to register]
  C --> E{Differences?}
  D --> E
  E -- None --> H[Sign-off and update verification date]
  E -- Yes --> F[Investigate within 10 working days]
  F --> G[Adjust register: write-off, add, relocate, impair]
  G --> H
  H --> I[Report results to CFO and auditor]
```

| Count ID | Site | Date | Assets in register | Found | Not found | Found not in register | Condition issues | Result *Example* |
|---|---|---|---|---|---|---|---|---|
| PV-2026-DE-01 *(Example)* | Leipzig hall | 2026-11-20 | 1,140 | 1,131 | 9 | 4 | 12 idle conveyors | 9 scanners written off; 4 items added; idle conveyors assessed in section 12 |
| PV-2026-VN-01 *(Example)* | Ho Chi Minh City office | 2026-11-27 | 310 | 310 | 0 | 0 | 0 | Clean; statutory count minutes signed |

Treat assets not found as written off in the period of the count, unless they
are located within the investigation window. Record the loss, the reason (theft,
unrecorded scrapping, transfer) and any insurance claim. Repeated differences at
a site point to a control failure in disposals or transfers, so feed them into
section 14.

In Vietnam, the statutory accounting framework expects a periodic physical count
of fixed assets with signed count minutes; keep the minutes with the CC-VN
statutory records in the format the local auditor expects.

## 12. Impairment indicators

<!-- Guidance: Assess indicators at each reporting date and record the conclusion even when there is none. Pitfall: treating impairment as a goodwill-only exercise and missing idle or damaged equipment. -->

At the end of each reporting period, assess whether there is any indication that
an asset or a cash-generating unit may be impaired, using the external and
internal sources that IAS 36 paragraph 12 lists. When an indicator exists,
estimate the recoverable amount and document the test in Impairment Test Memo
(`finance/impairment-test-memo`). Under US GAAP, the trigger and recoverability
test for long-lived assets held and used follow ASC 360-10.

| Indicator check | Source of evidence | FY2026 result *Example* |
|---|---|---|
| Physical damage or obsolescence found at the count | Section 11 | 12 conveyors idle at Leipzig; test performed |
| Assets idle, or plans to discontinue or restructure an operation | Operations plans, restructuring decisions | CC-VN service-centre consolidation (severance and office move): no owned assets left idle; FA-0004 fit-out stays in use; the Vietnam CGU goodwill test is in Impairment Test Memo |
| Performance worse than expected | Management reports, site profitability | No indicator |
| Significant adverse change in technology, market or legal environment | Market data, regulatory changes | No indicator |
| Market interest rates increased, affecting discount rates | Treasury | Monitored; no material change |
| Carrying amount of net assets above market capitalisation | Applies (listed in London and New York) | Market capitalisation above net assets at 2026-12-31; no indicator |
| CIP project delayed or likely to be abandoned | Section 7 | No indicator |

*Example conclusion:* the 12 idle conveyors (cost 54,000, carrying amount
32,400) will not be used after the sorter project completes. Recoverable amount
is fair value less costs of disposal, based on a dealer quote of 9,600 less
removal cost of 1,200 = 8,400. Impairment loss 32,400 - 8,400 = 24,000,
recognised in FY2026 in the full group register (the conveyors are not among the
six assets in the section 6 extract).

## 13. Statutory and tax differences

<!-- Guidance: Show where the group book differs from statutory and tax books, so that the tax team can compute deferred tax and the statutory accounts can be reconciled. Pitfall: adopting tax lives in the group book to avoid differences, which misstates depreciation. -->

| Difference | Group book | Other book | Effect *Example* |
|---|---|---|---|
| Capitalisation threshold, CC-VN | EUR 2,500 | VND 30 million in the statutory book (check current text) | Items between the thresholds are capitalised in one book and allocated as tools in the other |
| Useful life, CC-VN | Group life by class | Within the Circular 45 frame, registered with the tax authority | Temporary difference on NBV |
| Method, CC-VN | Straight-line | Declining balance with adjustment, where chosen and allowed | Temporary difference, larger in early years |
| Tax depreciation, CC-US | Straight-line | MACRS and any bonus depreciation under IRC section 168 (check the rate for the placement date) | Deferred tax liability on accelerated tax depreciation |
| Low-value assets, CC-DE | EUR 2,500 threshold | Immediate expensing of low-value assets under German income tax law up to the statutory amount (check current amount) | Small temporary differences |
| Capital allowances, CC-UK | Straight-line | Capital allowances replace accounting depreciation for tax | Deferred tax on the difference |

Keep the tax books in the same system as the group book where possible, so that
the tax base of each asset is available for the deferred tax calculation in
Income Tax Provision (`finance/income-tax-provision`). For CC-VN, the statutory
depreciation charge is generally deductible only when it follows the registered
method and the life frame; record the registration reference in the asset
master.

## 14. Controls

<!-- Guidance: List the controls that make the register complete, accurate and existing. Pitfall: no owner for the disposal process, so assets leave without anyone telling finance. -->

| Control ID | Control | Type | Frequency | Owner | Evidence |
|---|---|---|---|---|---|
| CTL-FA-001 | Additions above EUR 25,000 matched to an approved capex request before capitalisation | Preventive | Per addition | [@ap-lead] | Capex request ID in register |
| CTL-FA-002 | Monthly review of expense accounts for items that should have been capitalised (and vice versa) | Detective | Monthly | [@financial-controller] | Review sheet |
| CTL-FA-003 | CIP review with project managers; completed assets transferred | Detective | Monthly | [@financial-controller] | CIP review minutes |
| CTL-FA-004 | Depreciation preview reviewed before posting (section 9) | Detective | Monthly | [@financial-controller] | Signed preview |
| CTL-FA-005 | Register reconciled to the ledger: cost, accumulated depreciation, CIP, charge | Detective | Monthly | [@gl-accountant] | Reconciliation (section 10) |
| CTL-FA-006 | Disposal form signed by the custodian and finance before an asset leaves | Preventive | Per disposal | Site managers | Disposal forms |
| CTL-FA-007 | Physical verification of all sites | Detective | Annual; quarterly for IT end-user devices | [@financial-controller] | Count reports (section 11) |
| CTL-FA-008 | Year-end review of useful lives, residual values and methods | Detective | Annual | [@cfo] | Review memo |
| CTL-FA-009 | Impairment indicator assessment | Detective | Each reporting date | [@group-reporting-lead] | Section 12 record |
| CTL-FA-010 | Access to the asset master restricted; changes logged and reviewed | Preventive | Quarterly review | [@it-controls] | Access review |

Map these controls into the Risk and Control Matrix
(`compliance/risk-control-matrix`) where the group runs an internal control over
financial reporting programme.

## 15. Glossary and references

<!-- Guidance: Keep terms short and practical. -->

### 15.1 Glossary

| Term | Meaning |
|---|---|
| Available for use | The date the asset is in place and in the condition to operate as intended; depreciation starts here |
| Carrying amount / NBV | Cost less accumulated depreciation and accumulated impairment |
| CIP | Construction in progress: costs of assets not yet available for use |
| Component | A part of an asset with a significant cost and a different useful life, depreciated separately |
| Residual value | Estimated amount the entity would obtain today from disposal if the asset were already at the end of its life |
| Recoverable amount | Higher of fair value less costs of disposal and value in use (IAS 36) |
| Book | A set of depreciation rules (group, statutory, tax) applied to the same assets |

### 15.2 References

| Reference | Version or date | Use |
|---|---|---|
| IAS 16 Property, Plant and Equipment (IFRS Foundation) | Current issued version; name and paragraph numbers only | Recognition, cost, depreciation, review of lives and methods |
| IAS 36 Impairment of Assets; IAS 23; IAS 37; IFRS 5; IFRS 16 | Names only | Impairment, borrowing costs, decommissioning, held for sale, leases |
| FASB ASC Topic 360 Property, Plant, and Equipment | Name and number only | US GAAP equivalent |
| Circular 45/2013/TT-BTC (Vietnam), as amended by Circulars 147/2016/TT-BTC, 28/2017/TT-BTC and 30/2025/TT-BTC, and corrected by Decisions 1173/QD-BTC and 3165/QD-BTC | Continues to apply per Decision 1760/QD-BTC of 2026-07-01, until replaced and at the latest 2026-12-31 (check) | Recognition threshold, life frames, methods for CC-VN |
| Circular 99/2025/TT-BTC (Vietnam) | Applies from 2026-01-01; replaced Circular 200/2014/TT-BTC | Accounting regime and accounts for CC-VN |
| Internal Revenue Code section 168 (US) | Check current law | Tax depreciation for CC-US |
| GAO Standards for Internal Control in the Federal Government (GAO-25-107721) | 2025 revision, effective FY2026 | Control design language for section 14 |

## Standard and licence note

Structure aligned with the property, plant and equipment requirements of IAS 16,
IAS 36 and FASB ASC Topic 360, which are cited by name and paragraph or topic
number only; no text from IFRS Foundation or FASB publications is reproduced or
paraphrased. Based on Vietnamese legislation (Circular 45/2013/TT-BTC as amended
and Circular 99/2025/TT-BTC) and US federal law, cited by number, and on the GAO
Green Book (GAO-25-107721), a US government work in the public domain. The
policy, register layout, procedures, controls and worked examples are original
text. Corvid Commerce Group, its entities and every figure are fictional. Check
the current official version of every cited standard and law, and the law of
each jurisdiction, before use. Template licence: MIT.