Is fixed assets register is required

This query is : Resolved

Premanshu (Querist)
Follow

06 March 2012 Hi,

Please help me out to know that is it mandatory a Fixed Assets Register for any hotel & hospitality sector. If, yes than give me references of the same Act.

Regards,

Premanshu Dwivedi

Guest

Guest (Expert)

06 March 2012 In case the hotel is company then as per provisions of companies act Fixed asset register will be a mandatory requirement.

Premanshu

Premanshu (Querist)
Follow

07 March 2012 Hi Ketan,

Thanks for your valuable reply.

See, The hotel is subsidiary of Assessee than FAR is mandatory or not.

Regards,

Premanshu

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

01 August 2024 A Fixed Assets Register (FAR) is an essential document for maintaining records of a company's fixed assets. For a hotel or any other business, including those in the hospitality sector, maintaining a Fixed Assets Register is generally considered best practice, although specific regulatory requirements may vary. Here's a detailed view:

### **Mandatory Requirement:**

1. **Companies Act, 2013:**
- **Under the Companies Act, 2013**, there is no explicit provision that mandates the maintenance of a Fixed Assets Register for all companies. However, the Act requires companies to keep books of accounts that reflect a true and fair view of the company's financial position (Section 128 of the Companies Act). This typically includes detailed records of fixed assets, which are best maintained in a Fixed Assets Register.

2. **Accounting Standards:**
- **Indian Accounting Standards (Ind AS) and Accounting Standards (AS)**: According to these standards, companies are required to maintain detailed records of their fixed assets, including their acquisition, depreciation, and disposal. These standards are part of the accounting practices that guide companies in maintaining accurate financial records.

3. **Income Tax Act, 1961:**
- The Income Tax Act does not specifically mandate a Fixed Assets Register but requires companies to maintain books of accounts that reflect the assets and liabilities of the business (Section 44AA of the Income Tax Act). Maintaining a Fixed Assets Register helps in meeting these requirements.

### **For Subsidiary Companies:**

- If the hotel is a subsidiary of an assessee, it is still considered a separate legal entity. Therefore, the subsidiary is required to maintain its own Fixed Assets Register to comply with accounting and tax regulations.

### **Best Practice:**

- **Industry Practice**: In practice, maintaining a Fixed Assets Register is a best practice for all businesses, including those in the hospitality sector. It aids in tracking the acquisition, valuation, and depreciation of assets, ensuring proper accounting and compliance with financial regulations.

### **Conclusion:**

While the Fixed Assets Register might not be specifically mandated by law, it is essential for accurate financial reporting and compliance with accounting standards. It is highly advisable for businesses, including hotels and hospitality entities, to maintain a Fixed Assets Register for better financial management and reporting.

If you need specific legal references or detailed guidance, consulting a professional accountant or legal advisor familiar with the regulatory requirements for your jurisdiction is recommended.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now