Plant and Equipment Asset Audit Case Studies

Case 2 – Valuation of plant and equipment fixed assets for an Aged Care Provider

Aged Care requires the verification, reconciliation and valuation of various plant and equipment assets at 16 sites throughout Australia.


Aged Care requires a unique barcode to be attached to each asset. RGIS propose to replace the existing plastic laminated barcodes with high quality labels that will be clearly visible and identify Aged Cares name and or logo.

Reconciliation and Valuation

After detailing the assets, where possible, they are individually reconciled with your existing asset register.  At this time, where available, asset descriptions, serial numbers, location changes, asset categories and the like are updated. Any new (untagged) assets will be assigned an estimated reinstatement value.

Data fields

RGIS asset auditors will capture and report on the following asset data fields:

  • Asset ID number (barcode)
  • Site Name/Location
  • Make/Manufacturer/Model
  • Serial Number
  • Supplier (if known)
  • Asset Status (in-use, under repair, damaged, disposed)
  • Cost/Reinstatement Value


RGIS will provide three reports to assist with the reconciliation process:

  • Found assets
  • Not found assets
  • New assets (Untagged)

At the conclusion of the count and reconciliation, RGIS will provide a full report showing the count process used by RGIS, and listing any unusual findings.

Annual Audits

RGIS currently has no software suitable for clients to conduct internal audits. However, we suggest that Aged Care invest in a product such as Setons complete asset management kit. This comprises software suitable for conducting asset counts, entering new assets and any other details collected. A range of Symbol or Motorola scanners are available. This package cost starts from around $1200 depending on the scanner required. If purchasing this kit Aged Care would also receive a $200 discount on any barcodes purchased.

Valuation Definitions

Reinstatement Value. The estimated amount for replacing an asset by similar property in a condition equal to, but not better or more extensive than, its condition when new.[1]


RGIS asset auditors counted approximately 1,250 assets over 16 sites. In addition, RGIS reported that approximately 3,500 assets on the existing register were not located.

Approximately 115 hours were spent in data collection on this project, enabling a count rate of about 11 assets per hour. This low rate due to the nature of Aged Care Facilities, where high care was needed around clients, In addition about 35 hours were spent reconciling the counted data with the existing register.


Some issues that arose during the data collection, reconciliation and valuation were as follows:

  • Data collection was slow due to the nature of Aged Care Facilities where care was needed to be exercised around clients. In addition, only assets over $1,000 were counted meaning that sometimes only a small number of assets were seen at a site.
  • Due to the difficulty of RGIS identifying assets over $1,000, a number of assets were missed. This probably accounted for 30-40 assets over the total project. It was only because RGIS was reconciling the existing register with the collected data that these errors were identified.
  • The high number of assets ‘Not Found’ (about 3,500) was primarily due to the change in asset definition by Aged Care. In this instance the asset definition was changed from ‘Highly desirable’ assets, to only assets over $1,000. This accounted for about 2,200 of the 3,500 ‘Not Found’ assets
  • Of the remaining 1,300 ‘Not Found’ assets over $1,000:
    • About 500 were in categories not included in the scope of the project (building, land, building improvements etc)
    • Many of the remainder included:
      • Asset that had mistakenly put on the asset register as ‘Bulk’ lines
      • Old or obsolete computer equipment
      • Assets categorised as furniture, but that were actually flooring, building improvements or the like
      • Furniture assets that were individually over $1,000 but were excluded from the scope of the audit


This project was completed within budget and on time. Aged Care was extremely happy with the results of the asset auditors, and have requested follow up audits to be completed every three years. The fee for this project was around $ 15,500


RGIS asset audit teams basically conduct two types of asset audit, both of which require a full count of assets using a definition agreed on between RGIS and the client.


There are typically two types of asset reconciliation types:

  • With a depreciation schedule – This can be very difficult due to the following lack of information in the schedule:
    • Insufficient information – No make, model, serial number or location detail
    • Lines Bulked – Sometimes assets are added to a depreciation schedule as a bulk line (e.g. “Furniture”, “Computer x 24”, “XYZ Procet” ). These assets either have to be split before reconciling, or cannot be reconciled at all
    • Miscategorising – If an asset is categorised incorrectly it is sometimes overlooked in the reconciliation
  • With an asset register – This is usually easier to reconcile against as most asset registers have more detail than depreciation schedules, however the same matching problems can arise.


RGIS typically are engaged to do valuations for the following reasons:

  • Sale of Business – Typically a market value or depreciated replacement cost is applied.
  • Taxation – Typically a market value or depreciated replacement cost is applied, but reinstatement value is often also supplied.
  • Insurance – Typically a reinstatement value is supplied.

Ultimately the type of asset audit conducted is up to the client, and as can be seen from the two case studies, they usually combine a combination of both reconciliation and valuation, usually with barcodes attached, except for sale of business valuations.

Valuation Definitions

Market Value. The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.[2] In accounting standards, Fair Value is normally equated to Market Value.[3]

Depreciated Replacement Cost. The current cost of replacing an asset with its modern equivalent asset less deductions for physical deterioration and all relevant forms of obsolescence and optimisation.[4]  Depreciated Replacement Cost is typically used where there is insufficient market data to arrive at a Market Value.

Reinstatement Value. The estimated amount for replacing an asset by similar property in a condition equal to, but not better or more extensive than, its condition when new.[5]

[1]ANZVPS 2008, International Valuation Application 1, paragraph 3.1

[2] ANZVPS 2008, International Valuation Standards 1, paragraph 3.1

[3] ANZVPS 2008, International Valuation Standards 2, paragraph 6.2

[4] ANZVPS 2008, International Valuation Application 1, paragraph 3.1

[5] ANZVPS 2008, Australian Valuation Guidance Note 2, paragraph 4.8
RGIS conducts asset audits in all areas of Melbourne, Sydney, Adelaide, Brisbane, and throughout Australia


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