Which types of assets should be assessed during a physical inventory?

The assessment of fixed and disposable assets during a physical inventory is crucial for several reasons. Fixed assets, such as buildings, vehicles, and equipment, typically have a long-term use and are vital for the operational functionality of an organization. Ensuring that these assets are tracked and accounted for is essential for financial reporting, budgeting, and making strategic decisions.

On the other hand, disposable assets might include items that are used up or consumed over a short period, such as supplies or materials that are replaced frequently. Tracking these assets helps to manage stock levels effectively and prevents shortages or overstock situations, which can lead to increased costs.

By focusing on both fixed and disposable assets, an organization can maintain a comprehensive understanding of its resource allocation, usage, and financial health, making this approach an integral part of inventory management practices.