CLIENT : ………………………..................……..

DATE
SUBJECT : VERIFICATION OF PROPERTY, PREP. BY
PLANT & EQUIPMENT
REV. BY
AMOUNT : ………………………………………… Y/E
AUDIT WORK DONE
CORE AUDIT PROCEDURES Book/ Page W/P Notes
PROGRAMME Document No. Ref.
Checked

1. Carry out analytical procedures such as

(a) Comparison of the current figures with those
of prior periods.

(b) Return on fixed assets commensurd with

industry standards.

2. Examine any journal entries /other adjustments

made adding or removing assets.

3. Review the planned extent of reliance on internal

controls in this area & consider whether this
remains appropriate.

Existence/Completeness

4. Carry out physical inspection of assets including

both current year additions & assets purchased
in previous years.

5. Inspect insurance policies & assess adequacy of

coverage.

Ownership

6. (a) Confirm /inspect title deeds to all parties

(b) Inspect lease agreement/ obtain direct
information from bank/other custodian of PPE.

(c) Inspect the motor vehicle registration

documents for motor vehicles owned by the
company.
 (c) Inspect the motor vehicle registration
documents for motor vehicles owned by the
company.

AUDIT WORK DONE

CORE AUDIT PROCEDURES Book/ Page W/P Notes
PROGRAMME Document No. Ref.
Checked

Cost & Valuation

7. Ensure the entity has accounted for its PPE by

adopting the cost /the revaluation model.

8. Vouch additions to supporting documentation.

Ensure that;

(a) The cost is correctly recorded

(b) They have been properly authorised

(c) They have been correctly classified

(d) They are of a capital, not revenue nature

(e) They are supported with adequate
supporting documents.

(f) Assets aquired under finance leases are

treated correcrly in accordace with provision of
LKAS.

9. Vouch disposals to available evidence. Ensure

that:

(a) sales proceeds have been correctly accounted

for

(b) Profit/loss on disposal has been correctly

calculated

(c) They have been properly authorized

(d) They have been removed from the fixed asset
register

10. (a) Where there is a policy of revaluation for a

class of assets is that policy applied consistently
to all assets in that class?
 (b) For assets revalued during the year, inspect
professional valuers report.

AUDIT WORK DONE

CORE AUDIT PROCEDURES Book/ Page W/P Notes
PROGRAMME Document No. Ref.
Checked

Impairment

11. Consider whether are any indicators of

impairment, which might adversely affect the
value of the assets, and ensure that these have
been dealt with in accordance with in accordance
with LKAS.

(a) Where any such indication exists, inquire if

the entity has estimated the recoverable amount
of assets.

12. (The higher of an asset's fair value less cost to

sell & its value in use)

(b) Where an increase in carrying value is

attributable to a reversal of previous impairment
loss; confirm that the carrying value does not
exceeded the value at which the asset would
have been stated had no previous impairment
loss been recognized.

Depreciation

13. Compare bases & rates of depreciation with the

accounting policy.

14. Check the accuracy of calculation.

15. Ensure that no assets have been depreciated by

more than cost.
16.
Inquire whether there are any capital
commitments at the year end & if so disclose
them in the financial statements.

Has the reconciliation between the fixed asset

17. registers and nominal leger been confirmed?

Have fixed Asset Register been reveiwed for

18. obsolete and redundant items?
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date
Client Name :- Prepared by
Financial Year :- Reviewed by SA

As at
Description Ref As at (Financial Year)
(Comparative Year)

Property Plant & Equipment - -

Capital Work-in-Progress - -

TOTAL - -

Audit Notes

Audit Findings
(Including Reasons for Variation)

Conclusion/Recommendations
Signature
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client:- Prepared by
Financ:- Reviewed by SA

Audit Plan

Audit Test Test Discretion

Independently compute the amortized/capitalized amount during the year and the balance amount in lease hold land in ledgers Identify the sources of
Independently compute the amortized/ capitalized information used to compute the amortization/capitalization (Initial lease/purchase agreements) Consider method of revaluation, gain or loss from
amount Revaluation of Assets revaluation, Accounting treatments

For sample of disposals from transaction listing:

1 Agree disposal proceeds to supporting documentation (invoice, cash receipt)
2 Agree carrying value at disposal to asset register
Verify a sample of disposals & discarded/ 3 Check calculation of gain or loss on disposal ,Agree total gain or loss on disposal to general ledger and to disclosure in the financial statements,
capitalisation of PPE/WCP from checked listing considering appropriateness of theclassification of the amount charged/credited to the income statement

Verify the Physical existence of the asset

Select the sample of items and verify the physical existence of the assets and it completeness to the financial statement area.

onsider whether there are indications of impairment, and if so, check whether provision for impairment is required. (e.g.. changes in the entity's use of
its assets, decrease in market values, physical damage, operating losses etc). Where an impairment provision is required, check calculations and ensure
Consider the need for impairment of assets/ that the provision has been treated in accordance with generally accepted accounting principles.
intangibles/Leaserights

Evaluate the Impact of SLFRS to the opening balance and year and balances and verify the adjustment to the SLAS to SLFRS.
Evaluate the Impact of SLFRS
 AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Materiality Level : For the Final Audit

Materiality Level
To obtain reasonable assurance at the final stage we decided 1% of total turnover as a Planning Materiality

Planning Materiality Final Materiality

Materiality level = 1 % of Revenue xxxxxxxxxxxxxxx x 1% xxxxxxxxxxxxxxx x 1%

xxxxxxxxxxx xxxxxxxxxxx

Performance Materiality Level

75% of Planning Materiality level has selected as Performance Materiality level.

Performance Materiality level = 75% of Materiality Level xxxxxxxxxxx x 75% xxxxxxxxxxx x 75%

xxxxxxxxxxx xxxxxxxxxxxx

Clearly Trivial

Clearly Trivial has been selected as 5% of Planning Materiality Level xxxxxxxxxxx x 5% xxxxxxxxxxx x 5%

xxxxxxxx xxxxxxxxxxx

Reassessed the useful lives of the Plant, Machinery and Motor Vehicles
Assets and Bases of Their Valuation

> Property, Plant and Equipment

> Cost

> Cost and Valuation

> Subsequent Costs

> Depreciation/Amortization

The estimated useful lives for the current year are as follows:

Assets No Of Years Rate

Buildings
Plant and Machinery
Motor Vehicles
Equipment
Ergonomic Equipment
Furniture and Fittings
Computers
Other-Power/Electricity Supply
Water Sanitation
Security Fencing

The leasehold rights are being amortized in equal amounts over the shorter of lease term and the expected useful life of the assets as follows.
The asset’s residual values, useful lives and methods of depreciation are reviewed and adjusted if appropriate at each financial year end.

> Leases
 Finance Leases

> Operating Leases

> Impairment of Assets

AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Audit Findings
Signature
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Recognition
Recognize when it is probable that:
¦ The future economic benefits associated with the asset will flow to the entity
¦ The cost of the asset can be reliably measured

Measurement
Initially recorded at cost.
¦ Subsequent costs are only recognized if costs can be reliably measured and these will lead to
additional economic benefits flowing to the entity.

Cost comprises:

¦ Purchase price plus import duties and taxes.

¦ Any costs directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in a manner intended by management.
¦ The initial estimate of the costs of dismantling and removing the item and restoring the site
on which it is located.

Subsequent Measurement

The Cost Model

The asset is carried at cost less accumulated depreciation and impairment losses

The Revaluation Model

The asset is carried at a revalued amount, being its fair value at the date of the revaluation,
less subsequent depreciation, provided that fair value can be measured reliably.

¦
Revaluations should be carried out regularly (the carrying
amount of an asset should not differ materially from its fair
value at the reporting date – either higher or lower).

¦ Revaluation frequency depends upon the changes in fair

value of the items measured (annual revaluation for volatile
items or intervals between 3 - 5 years for items with less
significant changes).

¦ If an item is revalued, the entire class of assets to which

that asset belongs is required to be revalued.

¦ Revalued assets are depreciated the same way as under the cost model.
Transfer between reserves – depreciation on revaluation amount.

¦ An increase in value is credited to other comprehensive

income under the heading revaluation surplus unless it
represents the reversal of a revaluation decrease of the
same asset previously recognized as an expense, in this
case the increase in value is recognized in profit or loss.
 An increase in value is credited to other comprehensive
income under the heading revaluation surplus unless it
represents the reversal of a revaluation decrease of the
same asset previously recognized as an expense, in this
case the increase in value is recognized in profit or loss.

Depreciation

The depreciable amount is allocated on a systematic basis over the asset‘s useful life.
¦ The residual value, the useful life and the depreciation method of an asset are reviewed
annually at reporting date.
¦ Changes in residual value, depreciation method and useful life are changes in estimates are
accounted for prospectively in accordance with IAS 8 – Accounting Policies, Changes in
Accounting Estimates and Errors.

¦ Depreciation is charged to profit or loss, unless it is included in the carrying amount of

another asset.
¦ Depreciation commences when the asset is available for use.

Component Accounting
¦
Significant parts/components are required to be depreciated over their estimated useful life.

¦ Costs of replacing components are required to be capitalized.

¦
Continued operation of an item of Property, Plant and Equipment (PPE) may require regular
major inspections for faults regardless of whether parts of the item are replaced. When each
major inspection is performed, its cost is recognized in the carrying amount of the item of
PPE as a replacement if the recognition criteria are satisfied.

Disposals

¦ Remove the asset from the Statement of Financial Position on disposal or when withdrawn
from use and no future economic benefits are expected from its disposal.
¦ The gain or loss on disposal is the difference between the proceeds and the carrying amount
and is recognized in profit or loss.
¦
When a revalued asset is disposed of, any revaluation surplus may be transferred directly to
retained earnings. The transfer to retained earnings is not made through profit or loss.

Disclosures
¦ Measurement bases used for determining the gross carrying amount.
¦ Depreciation methods used.
¦ Useful lives or the depreciation rates used.
¦ Gross carrying amount and the accumulated depreciation at the beginning and end of the
period.
¦ A reconciliation of the carrying amount at the beginning and end of the period showing:
Additions / Assets classified as held for sale or included in
a disposal group classified as held for sale / Other disposals
/ Acquisitions through business combinations / Changes
resulting from revaluations and from impairment losses
recognized or reversed in other comprehensive /
Impairment losses recognized in profit or loss / impairment
losses reversed in profit or loss / Depreciation / Exchange
differences / Other changes.
¦
Existence and amounts of restrictions on title, and PPE pledged as security for liabilities.

¦ Contractual commitments for the acquisition of PPE.

AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)

Client Name :-
Financial Year :-

Master Schedule

Tangible Assets other than Biological Assets

01. Property, Plant & Equipment

Balance Additions/
Written -
As at Transfers Off

xxxxxxxx(Bigin
1.1. Gross Carrying Amounts ning)
Rs Rs Rs
At Cost

Assets on Finance Lease

Total Value of Depreciable Assets

Balance Charge for

Written -
1.2. Depreciation As at the year Off
xxxxxxxx(Biginning)
Rs Rs Rs
At Cost

Assets on Finance Lease

Total Depreciation

1.3. Net Book Values

Assets on Finance Lease

Work Done:
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date

Client Name :- Prepared by

Financial Year :- Reviewed by SA

Master Schedule

Capital Work-in-Progress

As at As at
(Financial Year (Comparative
end) Year end)

Balance as at 1st January /April

Add : Amount Incurred during the Year

Less : Amount Capitalized during the Year

Carrying value as at 31st December /March - -

Class of Asset-wise Break-up

Buildings
Plant and Machinery
Roads and Bridges
Hydro Power
Others

Work Done:
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Audit Note

> Calculate Differences

> Investigate Reasons for the Variances

Justification and conclusion

AUDITOR GENERAL'S DEPARTMENT

Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Physically Verification of Assets

Key Items

Physical
Asset
Category of Assets Assets Location Purchase Date Cost WDV Existence
Code
Yes/No
1
2
3
4
5

Note
AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

List of PPE Addition

Listing of during the year fixed assets additions :-

Category Location Date of Purchase Description Amount

 AUDITOR GENERAL'S DEPARTMENT
Working Sheet : Property Plant & Equipment (other than Immature/ Mature Plantations)
Date Signature
Client Name :- Prepared by
Financial Year :- Reviewed by SA

Imparment of Assets
Eg:
Impairment test by analysing insurance policies

Insurer :- Insurer :- Insurer :-

Policy No :- Policy No :- Policy No :-
Period Of Insurance :- Period Of Insurance :- Period Of Insurance :-
Currancy Type :- LKR Currancy Type :- LKR Currancy Type :- LKR

Basis for testing :- Written Down Value above the Assets

Total Sum
Written Down
Category of Assets Insured (Market Impaired or Not
Value
Value)

WDV As At 31/03/2017

WDV as a percentage of Sum Insured

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