1. Purpose
This policy sets out how [Organisation] acquires, identifies, records, uses, maintains, verifies and disposes of its physical assets. Its purpose is to safeguard those assets against loss and misuse, keep an accurate asset register that supports reliable financial reporting, make sure assets are maintained so they remain safe and fit for purpose, and assign clear accountability for every asset throughout its life.
2. Scope
This policy applies to all employees, contractors and volunteers of [Organisation] at all sites, and to all tangible assets owned, leased or held on behalf of [Organisation], including land and buildings, plant and machinery, vehicles, furniture and fittings, IT and communications equipment, tools, and portable or attractive items below the capitalisation threshold that are designated as controlled items. Intangible assets and consumable stock are covered by separate procedures.
3. Definitions
- Asset — a tangible item controlled by [Organisation] that is expected to be used for more than one year.
- Fixed (capital) asset — an asset whose cost meets or exceeds the capitalisation threshold and is recorded on the balance sheet.
- Controlled item — an asset below the threshold that is portable, attractive or sensitive (e.g. laptops, phones, tools) and is tracked for safeguarding.
- Asset register — the authoritative record of all fixed assets and controlled items.
- Custodian — the person accountable for an asset’s day-to-day care and location.
- Net book value (NBV) — cost less accumulated depreciation.
- Disposal — any removal of an asset from [Organisation]’s ownership or control, including sale, donation, scrapping and write-off.
4. Roles and responsibilities
- [Board / Executive] — approves this policy and write-offs above [amount].
- [Finance Director / CFO] — owns the policy, the capitalisation and depreciation rules, and the reconciliation of the register to the general ledger.
- [Asset Manager / Operations] — maintains the asset register, the tagging standard and the audit programme.
- Department heads — ensure assets in their area are recorded, used appropriately and available for verification.
- Custodians — look after assigned assets, report moves, faults, loss or damage promptly, and return assets when asked or on leaving.
- IT — manages the lifecycle, security and data sanitisation of IT equipment.
- All staff — use assets only for authorised purposes and report suspected loss or misuse.
5. Capitalisation threshold and classification
An item is capitalised as a fixed asset when its cost is [currency amount] or more and its useful life exceeds one year. Groups of similar items bought together may be capitalised as a group when their combined cost exceeds [amount]. Items below the threshold are expensed, but portable, attractive or sensitive items listed in Appendix [A] are recorded as controlled items. Each asset is assigned a category, which sets its default useful life and depreciation method as approved by Finance.
6. Acquisition and receipt
Assets are acquired only through the approved purchasing process and budget. On receipt, the receiving department checks the delivery against the purchase order, records the serial number and warranty details, and notifies [Asset Manager] within [5] working days so the asset can be tagged and entered in the register before it is put into use. Donated or leased assets follow the same receipt process and are recorded with their fair value or lease reference.
7. Identification and tagging
Every fixed asset and controlled item carries a unique asset ID that is never re-used. The ID is shown on a durable tag — QR code, barcode, NFC or UHF RFID, according to the tagging standard — applied in the standard position for its class. Where an asset cannot be tagged, the ID is recorded against its serial number and the reason is noted in the register. Damaged or missing tags are replaced promptly and the replacement is recorded.
8. The asset register
The asset register is maintained in [system] and is the single source of truth. For each asset it records at least: asset ID, description, category, serial number, location, custodian, department, acquisition date, cost, useful life, depreciation method, accumulated depreciation, net book value, condition and status. Changes are made only by authorised users, and a history of changes is retained. Finance reconciles the register to the general ledger at least [quarterly].
9. Custody, use and movement
Each asset has a named custodian or a responsible department. Assets are used only for [Organisation]’s business unless otherwise authorised. Any change of location between rooms, sites or departments, or change of custodian, is recorded in the register at the time of the move, using the asset transfer procedure where required. Portable assets issued to individuals are checked out with a due date where appropriate and checked back in on return. Assets are returned when a custodian leaves or changes role.
10. Maintenance and calibration
Assets are maintained in line with manufacturer guidance, safety regulations and their criticality. Preventive maintenance and calibration schedules are set for [critical categories]; work orders record the work done, parts, labour cost and downtime. Warranty, service and insurance contracts are recorded against the asset, and expiry dates are reviewed at least [monthly]. Faults and damage are reported through [process] and assets unsafe to use are taken out of service.
11. Physical verification (audits)
A full physical verification of fixed assets is carried out at least [annually], with cycle counts of high-value or high-risk categories every [quarter]. Counts are made against a register baseline taken at a stated cut-off date, and every variance — missing, misplaced, unregistered or duplicate — is investigated and resolved. Results, including audit accuracy, are reported to [Finance Director] and the register is corrected. Counts should be carried out or reviewed by someone independent of the custodian.
12. Depreciation and valuation
Fixed assets are depreciated from the date they are available for use over their useful life, using the method and residual value set for their category (normally straight-line unless Finance approves otherwise). Depreciation is calculated [monthly] and reviewed before it is posted. Useful lives and residual values are reviewed at least annually. Tax depreciation follows the rules of the relevant tax authority and may differ from book depreciation. Assets are reviewed for impairment when there is an indication their value has fallen.
13. Loss, damage and disposal
Loss, theft or damage is reported to [Asset Manager] within [24 hours], and theft is reported to the police where appropriate. No asset is disposed of without an approved disposal form. Disposal methods — sale, trade-in, donation, recycling, scrapping or write-off — are chosen to obtain best value and meet environmental and data-protection obligations. All data-bearing devices are sanitised or destroyed and certificates retained. On disposal the register is updated, the asset is marked disposed, and the gain or loss is recorded by Finance.
14. Compliance, review and approval
Breaches of this policy may lead to disciplinary action in line with [HR policy]. Exceptions require written approval from [Finance Director]. This policy is reviewed at least annually, or sooner if regulations, systems or the organisation change significantly.