The process of physical-accounting reconciliation consists in the alignment between the accounting situation in the fixed asset register and the reality found during the inventory phase.
Like the inventory, also reconciliation, which represents the real added value of fixed asset management, is developed and realized in a short time, through a “turnkey” service by expert personnel who boasts experience in over 400 projects.
In this context, the physical-accounting reconciliation process will highlight three fundamental situations:
- Assets in the accounting registry that match with the inventory
- Assets in the accounting registry that do not have a match in the inventory results
- Assets physically identified but not present in the accounting registry
The results of this activity allow to obtain a univocal correspondence between accounting data (tax category, accounting position, year of capitalization, invoice, historical cost, depreciation rate, residual value, …) and the physical data gathered during the inventory phase (localization of the asset, cost center, tag number, description of the asset, wear condition, …), allowing to fix any accounting-physical mismatches, addressing the needs on the administration/management side or requests from the auditing firms, the mayors, the audit or any other institution whose purpose is to check the financial situation.
The outcome of the reconciliation therefore allows to:
- Budget the correct values which correspond to reality (Leg. Dec. 231/01)
- Track and identify the company assets subject to financial support (Law 488/92)
- Facilitate the elimination of “ghost” assets registered in the fixed asset register
- Meet requests related to SOX, IAS, IFRS
- Generate more accurate financial reports which allow an effective control of investments
- Facilitate answers to the questions of the auditors, of the board of statutory auditors and of the audit
- Allow the almost automatic migration of the reconciliation data to any ERP system (SAP, JD Edwards, Oracle, Tekno, Zucchetti, AS400, …) or management software
- Identify the reference accounting guidelines and balance sheet items in case of disposal, sale, dismantlement or transfer of business branch