{"id":6966,"date":"2026-03-10T12:47:13","date_gmt":"2026-03-10T07:17:13","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=6966"},"modified":"2026-03-31T12:48:41","modified_gmt":"2026-03-31T07:18:41","slug":"fixed-asset-register-legal-requirements-under-the-companies-act","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/","title":{"rendered":"Fixed Asset Register: Legal Requirements under the Companies Act"},"content":{"rendered":"<p>In India, the legal and governance practice of businesses requires them to keep proper records of their company assets. The Fixed Asset Register (FAR) is one of the most crucial tools towards this end. The company\u2019s act, 2013, mandates companies to keep good books of their fixed assets to exercise transparency, accountability and compliance. The knowledge of such legal requirements assists organizations to avoid penalty, audit problems, and misreporting.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#What_Is_a_Fixed_Asset_Register\" >What Is a Fixed Asset Register?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Relevant_Provisions_under_the_Companies_Act_2013\" >Relevant Provisions under the Companies Act, 2013<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Mandatory_Details_to_Be_Maintained\" >Mandatory Details to Be Maintained<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Physical_Verification_Requirement\" >Physical Verification Requirement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Record_Retention_and_Accessibility\" >Record Retention and Accessibility<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Consequences_of_Non-Compliance\" >Consequences of Non-Compliance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Best_Practices_for_Compliance\" >Best Practices for Compliance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-legal-requirements-under-the-companies-act\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_a_Fixed_Asset_Register\"><\/span><strong><b>What Is a Fixed Asset Register?<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Fixed Asset Register is a comprehensive list of all assets owned by a company (both tangible and intangible). It is a record-keeping document that follows the lifecycle of assets in terms of acquisition, location, usage, depreciation and disposal of assets. Although the Companies Act does not specify a strict procedure, it clearly mandates the maintenance of full and correct records of assets.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Relevant_Provisions_under_the_Companies_Act_2013\"><\/span><strong><b>Relevant Provisions under the Companies Act, 2013<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The main law behind keeping a <strong><a href=\"https:\/\/www.akgvg.com\/fixed-assets-management\">Fixed Asset Register<\/a><\/strong> is based on section 128 of Companies Act, 2013 that stipulates that each company must maintain proper books of account. These books must record the specifications of assets and keep records on accrual basis and according to the double-entry system of accounting.<\/p>\n<p>Furthermore, Section 134 places responsibility on the Board of Directors to make sure that appropriate accounting records are kept and assets are protected. Auditors, under Section 143, are also required to verify whether proper records of fixed assets are maintained and whether physical verification has been conducted at reasonable intervals.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Mandatory_Details_to_Be_Maintained\"><\/span><strong><b>Mandatory Details to Be Maintained<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>As per legal and audit expectations, a Fixed Asset Register should include:<\/p>\n<ul>\n<li>Description of the asset<\/li>\n<li>Unique identification or asset code<\/li>\n<li>Acquisition Date<\/li>\n<li>Original cost and capitalization details<\/li>\n<li>Asset Location<\/li>\n<li>Depreciation method and useful life<\/li>\n<li>Accumulated depreciation and netbook value<\/li>\n<li>Details of revaluation, impairment, or disposal<\/li>\n<\/ul>\n<p>These details ensure traceability and support accurate financial reporting.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Physical_Verification_Requirement\"><\/span><strong><b>Physical Verification Requirement<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Companies Act, read with audit standards and CARO (Companies Auditor\u2019s Report Order), emphasizes the physical verification of fixed assets. Firms should ensure that they verify assets at reasonable intervals and reconcile any differences that may be there. Mismatch between records and physical assets should be appropriately researched and re-adjusted in the books.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Record_Retention_and_Accessibility\"><\/span><strong><b>Record Retention and Accessibility<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Companies are required to retain asset records for at least eight financial years, as specified under Section 128. The records can take an electronic format, so long as the records are accessible in India and are capable of being retrieved in a readable format for inspection by auditors, regulators, or authorities.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Consequences_of_Non-Compliance\"><\/span><strong><b>Consequences of Non-Compliance<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Failure to maintain a proper Fixed Asset Register can lead to:<\/p>\n<ul>\n<li>Qualified or adverse reports of audit<\/li>\n<li>Scrutiny and fines<\/li>\n<li>Low internal controls and higher fraud risk<\/li>\n<li>Misstatement of financial results<\/li>\n<\/ul>\n<p>Directors and responsible officers may also be held liable for non-compliance.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Best_Practices_for_Compliance\"><\/span><strong><b>Best Practices for Compliance<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Companies are expected to maintain the Fixed Asset Register to ensure that they comply with the requirements of the law; they are supposed to verify the Fixed Asset physically regularly and ensure that the records of the fixed assets are balanced with the financial statements. Accuracy and audit readiness can also be enhanced by use of asset management software.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong><b>Conclusion<\/b><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Having a Fixed Asset Register as per the Companies Act is not only a statutory requirement but it is also a major aspect of good corporate governance. Compliance can be facilitated by having proper records of assets, checking periodically and doing good documentation to enhance internal control and facilitate transparent reporting of their financial status.<\/p>\n<p><strong><b>This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise.\u00a0<\/b><\/strong><a href=\"https:\/\/www.akgvg.com\/\"><strong><u><b>AKGVG &amp; Associates<\/b><\/u><\/strong><\/a><strong><b>\u00a0does not intend to advertise its services through this.<\/b><\/strong><\/p>\n<blockquote><p><strong>Also Read:<\/strong><a href=\"https:\/\/www.akgvg.com\/blog\/fixed-asset-register-preparation-a-step-by-step-guide-for-businesses\/\">Fixed Asset Register Preparation: A Step-by-Step Guide for Businesses<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>In India, the legal and governance practice of businesses requires them to keep proper records of their company assets. The Fixed Asset Register (FAR) is one of the most crucial tools towards this end. The company\u2019s act, 2013, mandates companies to keep good books of their fixed assets to exercise transparency, accountability and compliance. The&#8230;<\/p>\n","protected":false},"author":1,"featured_media":6967,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1896,1565],"tags":[2055,2058,2057,2059,2054,680,1570,2052,2053,2056],"class_list":["post-6966","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fixed-asset","category-far","tag-asset-register-compliance-india","tag-asset-tracking-for-companies","tag-depreciation-schedule-companies-act","tag-far-audit-compliance","tag-far-under-companies-act-2013","tag-fixed-asset-management","tag-fixed-asset-register","tag-fixed-asset-register-companies-act","tag-fixed-asset-register-legal-requirements","tag-property-plant-and-equipment-records"],"_links":{"self":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/6966","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/comments?post=6966"}],"version-history":[{"count":4,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/6966\/revisions"}],"predecessor-version":[{"id":7043,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/6966\/revisions\/7043"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media\/6967"}],"wp:attachment":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media?parent=6966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/categories?post=6966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/tags?post=6966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}