Fixed Assets:
Fixed assets comprise premises and other fixed assets such as furniture and fixtures, motor vehicles, office equipment, computers, other intangible assets such as application software and other computer software, etc.
In the case of most banks, fixed assets can be purchased by the head= office, regional/zonal offices and branches up to the monetary ceiling specified (though purchase of land and buildings is usually centralised) for themselves as also for offices within their control. However, banks generally prefer to centralise the function of obtaining insurance and obtain a comprehensive policy for assets at numerous locations (to avail the benefit of rebate on bulk business). Fixed assets, particularly furniture and fixture, consumer durables, etc. are provided by banks to the staff and the account for the same is maintained at the office where the employee is posted. For disposal of fixed assets, powers are delegated to various levels in the bank.
As far as maintenance of records relating to fixed assets is concerned, practices vary among banks. In some banks, the offices acquiring the fixed assets have to maintain proper records including the provision of depreciation thereon whereas in case of some banks, the same is being done at Head Office. In such a case, the acquisitions, disposals, etc. are advised by the branch/other office concerned to the head office through the inter-branch accounting mechanism. A variant of this practice involves the recording of depreciation by branches and other offices based on the advice received from the head office. In recent times, some of the banks have installed Fixed Asset Management Software and the information relating to purchase, sale of fixed assets and depreciation thereon (in some cases) is accounted for with the help of such a software. This is usually done at a centralized HO level and reports are generated at branches and/or regional/Zonal offices. In some cases, passing of entries of certain types of IT assets, like computers, printers, ATMs etc., are centralized at the HO. However, physical records need to be updated at branches. Also branches need to update records/inform HO in case there has been physical movement of assets from one branch/location to another including in case of transfers at staff quarters or disposal. At the branch level, an auditor needs to conduct a physical verification of all assets particularly those acquired during the year and match the same with fixed asset management system (manual or electronic). Discrepancies, noticed if any, on such verification should have been properly dealt with in the books.