Reliable accounting services Iraq should include control over the assets a business buys, moves, uses, repairs, and disposes of. A fixed asset register is the item-level record that connects each vehicle, machine, computer, fixture, or other long-term asset to its cost, location, owner, depreciation, and evidence.
Quick answer: Build one controlled register with a unique ID for every asset, approved classes and useful lives, invoice and payment evidence, branch and custodian details, monthly depreciation, movement approvals, physical verification, and a reconciliation to the general ledger. A spreadsheet can work for a small business, but ownership and review matter more than the tool.
Disclaimer: This guide is for general information only and is not legal, tax, customs, or accounting advice. Recognition, depreciation, tax treatment, documentation, and audit requirements can change. Verify the policy with the relevant Iraqi authority, your auditor, or a qualified advisor before acting.
Hanooot is an Iraqi operating partner founded in Baghdad in 2022. Our accounting services in Iraq connect bookkeeping, monthly close, management reporting, controls, and audit readiness to the way the business actually operates.
What is a fixed asset register?
A fixed asset register is a detailed schedule of long-term tangible assets controlled by a business. It supports accounting, physical custody, insurance, maintenance, budgeting, audit evidence, and disposal decisions.
The register is more than a depreciation worksheet. It should answer five questions for every item: what is it, what did it cost, where is it, who is responsible for it, and what is its current accounting status?
Under IAS 16, property, plant, and equipment are recognized and depreciated according to principles including systematic allocation over useful life and review of useful life and residual value. The IFRS standard should be applied through the company's approved policy and professional judgment (IFRS Foundation).
Which purchases belong in the register?
Not every purchase is a fixed asset. A company needs an approved capitalization policy that distinguishes long-term assets from inventory, repairs, consumables, prepaid costs, and ordinary expenses.
1. Expected use
The item is expected to support operations beyond the current short period rather than being held for sale.
2. Control and benefit
The company controls the item and expects future economic benefit or service potential from it.
3. Reliable cost
The acquisition or construction cost can be measured and supported by evidence.
4. Company policy
The item meets the approved capitalization threshold and asset-class rules. The threshold used in the worked example below is illustrative, not an Iraqi tax rule.
What fields should the fixed asset register contain?
Use fields that support both finance and operations. A record that contains only cost and depreciation cannot prove where the item is or who holds it.
| Field | Purpose | Example |
|---|---|---|
| Asset ID and tag | Unique identification | BG-IT-0042 |
| Description and serial number | Distinguishes similar items | Laptop, serial ABC123 |
| Acquisition date and cost | Recognition and measurement | 15 March; IQD 2,400,000 |
| Supplier and document reference | Audit trail | Invoice INV-218 |
| Asset class | Policy and reporting | IT equipment |
| Branch, room, and custodian | Physical accountability | Baghdad, Finance, employee ID |
| Useful life and residual value | Depreciation basis | 4 years; IQD 0 |
| Depreciation method | Monthly calculation | Straight-line |
| Accumulated depreciation | Historical charge | IQD 600,000 |
| Carrying amount and status | Current report | Active; IQD 1,800,000 |
| Disposal reference | Controlled exit | Approval and sale receipt |
Figures are indicative and can change by asset type, authority review, exchange rate, company policy, and current regulation. Verify before making a financial decision.
How should assets be tagged and assigned?
Asset tagging links the accounting record to the physical item. Use a durable barcode, QR code, or numbered label where practical, but keep serial numbers and other manufacturer identifiers in the register too.
1. Assign the tag at receipt
Do not wait until year-end. The receiving team should identify the purchase, attach the tag, and submit the evidence before the asset is deployed.
2. Name a custodian
The custodian confirms possession and reports movement, damage, loss, or return. Custody does not mean personal ownership or accounting responsibility.
3. Record the exact location
Use branch, building, floor, room, warehouse zone, or vehicle assignment. A city alone is often too broad for verification.
4. Approve movements
Transfers between Baghdad, Basra, Erbil, Mosul, or internal departments should update the register through a signed or digital workflow.
How do you calculate and review depreciation?
Depreciation allocates depreciable cost systematically across the period the asset is expected to be used. The policy should specify method, useful life, residual value, start date, treatment of components, and review responsibilities.
| Asset class | Illustrative useful life | Review focus |
|---|---|---|
| Computers and devices | 3-5 years | Obsolescence and reassignment |
| Office furniture | 5-10 years | Condition and location |
| Vehicles | 4-8 years | Mileage, condition, major components |
| Warehouse equipment | 5-10 years | Utilization and maintenance |
| Leasehold improvements | Shorter of useful life or relevant term | Contract and renewal assumptions |
Figures are illustrative accounting assumptions, not prescribed Iraqi tax rates or lives. Actual policy depends on applicable reporting standards, tax treatment, contracts, use, authority review, and professional advice.
The finance team should review useful life and residual value at least at each financial year-end under IAS 16 and investigate material changes in condition or use sooner.
What is the monthly fixed-asset workflow?
A clean month-end process prevents a large annual cleanup.
1. Capture additions
Match approved purchase requests, receiving evidence, invoices, payment records, and assets placed in service.
2. Review work in progress
Separate assets not yet ready for use from completed assets. Do not start depreciation merely because cash was paid.
3. Process transfers and disposals
Update location and custodian changes. For disposals, retain approval, buyer or scrap evidence, proceeds, and accounting calculation.
4. Run depreciation
Calculate the monthly charge under the approved policy, review exceptions, and post the journal with a clear reference.
5. Reconcile to the ledger
Compare gross cost, accumulated depreciation, additions, disposals, and carrying amount by asset class. Investigate every difference before close.
This workflow should sit beside the monthly close controls guide, not as a separate year-end exercise.
How do you reconcile the register to the general ledger?
Start with the previous approved closing balance. Add current-period acquisitions and transfers between classes, subtract disposals, post depreciation, and compare the expected closing balance with both the register and ledger.
The reconciliation should identify timing differences, duplicate postings, unrecorded invoices, assets expensed incorrectly, disposed items still depreciating, and manual journals with no item-level support. A reviewer independent of preparation should approve the reconciliation.
Use the financial statements guide to connect the asset schedule to the balance sheet, profit and loss, cash flow, and management commentary.
What is a worked fixed-asset example?
Assume an Iraqi company buys five laptops for IQD 2,400,000 each and pays IQD 600,000 for directly attributable setup of the group. The approved accounting policy uses straight-line depreciation over four years with no residual value, and all five are ready for use on the same date.
- Laptop cost: 5 × IQD 2,400,000 = IQD 12,000,000.
- Setup cost: IQD 600,000.
- Total depreciable cost: IQD 12,600,000.
- Annual depreciation: IQD 12,600,000 ÷ 4 = IQD 3,150,000.
- Monthly depreciation: IQD 3,150,000 ÷ 12 = IQD 262,500.
- Cost per tagged asset: IQD 12,600,000 ÷ 5 = IQD 2,520,000.
After 12 full months, accumulated depreciation is IQD 3,150,000 and the carrying amount is IQD 9,450,000. These figures are illustrative. The company must confirm capitalization, timing, useful life, residual value, allocation, and tax treatment under its approved policy and applicable requirements.
How should physical verification work?
Physical verification proves that recorded assets exist and that unrecorded items are investigated. Use a list by location, scan or inspect each tag, record condition and custodian, and document exceptions.
1. Register-to-floor testing
Select items from the register and locate them physically. This tests existence.
2. Floor-to-register testing
Select visible equipment and trace it back to the register. This tests completeness.
3. Exception resolution
Missing, damaged, idle, untagged, or relocated items need an owner, evidence, decision, and deadline. Do not simply overwrite the location to make the count agree.
Which fixed-asset controls prevent common errors?
Separate requesting, approving, receiving, recording, holding, and disposing where company size allows. Require approval for capital spending and movement. Lock asset-class policies. Restrict manual changes to cost and accumulated depreciation. Review duplicate serial numbers and invoices. Investigate zero-value active assets and fully depreciated assets still in use.
For stronger reporting discipline, link the register to the principles in the IFRS accounting guide for Iraqi businesses. Software can automate calculations, but it cannot replace evidence, ownership, and review.
Frequently asked questions
What information should an Iraqi fixed asset register contain?
Record a unique asset ID, description, serial number, acquisition date and cost, supplier document, branch and physical location, custodian, asset class, useful life, residual value, depreciation method, accumulated depreciation, carrying amount, status, and disposal evidence.
How often should a business verify fixed assets?
Review additions and disposals monthly and perform a documented physical verification at least annually, with more frequent checks for portable, valuable, or high-risk assets. The frequency should reflect asset mobility, branch count, control quality, and audit requirements.
Is a fixed asset register the same as the general ledger?
No. The general ledger contains summarized financial balances, while the fixed asset register carries item-level details and history. The register should reconcile to the ledger by asset class, but each serves a different control and reporting purpose.
Can Hanooot help clean and maintain a fixed asset register?
Yes. Hanooot can define asset classes, clean opening data, design tagging and approval controls, reconcile the register to the ledger, calculate monthly depreciation under approved policies, and support physical verification and audit readiness.
What is the next practical step?
Export the current ledger balances, list every known asset by location, and compare the two before choosing new software. The first objective is an explained opening position, not a perfect-looking file.
If your business needs help building, reconciling, or maintaining its register, contact Hanooot for practical accounting and control support in Iraq.