What's the big deal about fixed assets?
If the PCAOB starts to review auditor work papers dealing with Property, Plant, and Equipment (PP&E) on a more intensive basis, will your organization be ready? What if fair value reporting for PP&E were required?
As timely as it is complete, Internal Control of Fixed Assets peels back the layers surrounding the often-complex topic of internal controls for PP&E. This nuts-and-bolts book provides authoritative, step-by-step guidance on developing a system of internal controls for fixed assets, covering:
IFRS versus GAAP: what you must know
Internal control, Sarbanes-Oxley, and the PCAOB
Capitalization and expense of PP&E
Depreciation for books and taxes
Contingent assets and liabilities
Internal auditing of PP&E
With up-to-the-minute discussion of IFRS and GAAP, this is a must-have guide for controllers, auditors, and CFOs, providing practical and proven advice on maintaining a functioning internal control system that will withstand the closest scrutiny from independent public accountants and, ultimately, the PCAOB. Get your existing system in order and stay far ahead of your competitors with the straightforward business analysis in Internal Control of Fixed Assets.
Table of Contents
- Title Page
- Copyright Page
CHAPTER ONE 1 - Internal Control, Sarbanes-Oxley, and the Public Company Accounting Oversight Board
- INTERNAL CONTROLS OVER PROPERTY, PLANT, AND EQUIPMENT-MANDATORY BUT WEAK
- INTERNAL CONTROLS OVER WORKING CAPITAL
- SECURITIES AND EXCHANGE COMMISSION AND PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD SCRUTINY OF FINANCIAL STATEMENTS
- WHY DO AUDITORS NOT SPEND MORE TIME ON PROPERTY, PLANT, AND EQUIPMENT?
- WHO IS RESPONSIBLE FOR INTERNAL CONTROL OVER PROPERTY, PLANT, AND EQUIPMENT?
- “WHAT IS SO HARD ABOUT THE JOB?”
- CHAPTER TWO 2 - Capitalization versus Expense
- CHAPTER THREE 3 - Asset Life Cycle—Controls and Software
CHAPTER FOUR 4 - Depreciation and Amortization for Books and Taxes
- INTERNAL CONTROL FOR DEPRECIABLE TANGIBLE ASSETS
- DETERMINING USEFUL LIVES WHENEVER NEW ASSETS ARE ACQUIRED
- CHOOSING ACCOUNTING LIVES
- HOW VALUATION SPECIALISTS DETERMINE ECONOMIC LIVES
- DETERMINING LIVES FOR INTANGIBLE ASSETS
- CHANGING LIVES AND DEPRECIATION FOR EXISTING ASSETS
- LEASING AS A WAY TO UTILIZE DEPRECIATION
CHAPTER FIVE 5 - Impairment Testing
- TESTING INTANGIBLE ASSETS THAT ARE NOT AMORTIZED
- TESTING FOR IMPAIRMENT OF PROPERTY, PLANT, AND EQUIPMENT, AND AMORTIZABLE INTANGIBLES
- REVIEWING LIVES FOR ASSETS ALREADY IN SERVICE
- TESTING FOR GOODWILL
- REPORTING UNITS
- DETERMINING THE FAIR VALUE OF A REPORTING UNIT
- PHASE II TEST OF ACCOUNTING STANDARDS CODIFICATION 350
- UNDERSTANDING IMPAIRMENT CHARGES
- CHAPTER SIX 6 - Physical Control of Property, Plant, and Equipment
CHAPTER SEVEN 7 - Taking a Physical Inventory
- PLANNING AND USING THE PHYSICAL INVENTORY
- WHO SHOULD BE RESPONSIBLE?
- USE OWN STAFF, OR OUTSOURCE?
- WHAT MINIMUM DOLLAR CUTOFF SHOULD WE USE?
- INITIAL EFFORT—PARTIAL FACILITY VERSUS TOTAL
- THE $64,000 QUESTION—ASSETS TO LISTING OR LISTING TO ASSETS?
- RECONCILIATION OF THE INVENTORY TO THE RECORDS
- FULLY DEPRECIATED ASSETS
- RECONCILIATION PROCESS
- REVISED ASSET LIVES
- CHAPTER EIGHT 8 - Reconciliation of Physical Inventory to Accounting Records
- CHAPTER NINE 9 - Fixed Assets in a Business Combination
- CHAPTER TEN 10 - Insurance for Fixed Assets
- CHAPTER ELEVEN 11 - Property Taxes—Personal Property and Real Estate
CHAPTER TWELVE 12 - Developing the Fair Value of Fixed Assets
- WHAT IS THE FAIR VALUE OF PROPERTY, PLANT, AND EQUIPMENT?
- VALUE IN-USE OF PROPERTY, PLANT, AND EQUIPMENT
- WHAT WOULD HAPPEN IF FAIR VALUE REPORTING FOR PROPERTY, PLANT, AND EQUIPMENT WAS REQUIRED?
- CONNECTION BETWEEN FAIR VALUE AND BOOK VALUE
- WHAT WOULD INVESTORS LEARN FROM FAIR VALUE DISCLOSURES OF PROPERTY, PLANT, AND EQUIPMENT?
- CHAPTER THIRTEEN 13 - Control of Fixed Assets under International Financial REPORTING STANDARDS
CHAPTER FOURTEEN 14 - Component Depreciation for Buildings
- INTERNATIONAL FINANCIAL REPORTING STANDARDS HAS A DIFFERENT APPROACH
- COMPONENT DEPRECIATION FOR TAXES
- COMPLYING WITH INTERNAL REVENUE SERVICE REQUIREMENTS
- INTERNAL REVENUE SERVICE REVIEW OF A COST SEGREGATION STUDY
- COST SEGREGATION STUDY FOR NEW CONSTRUCTION
- WILL COST SEGREGATION LOWER MY PROPERTY TAX EXPENSES?
- COMPONENTIZATION FOR FINANCIAL REPORTING
- APPENDIX - Excerpt of Internal Revenue Service Cost Segregation Audit Guide
- About the Author
- Title: Internal Control of Fixed Assets: A Controller and Auditor's Guide
- Release date: March 2011
- Publisher(s): Wiley
- ISBN: 9780470539408