FAR vs. barcode-scan reconciliation with four deterministic exception classes — fixed asset verification automation delivering CARO 2020 working papers in under 60 seconds.
| Asset Code | Description | Location | Condition | WDV (₹) |
|---|---|---|---|---|
| FA-LAP-00012 | Dell Latitude 5520 | Bengaluru HO — 2F | Working | 45,000 |
| FA-AC-00055 | Voltas 1.5T Split AC | Mumbai Branch | Scrapped | 12,400 |
| FA-SRV-00031 | HP ProLiant DL360 | Chennai Branch — SR | Working | 1,80,000 |
| FA-PRT-00071 | HP LaserJet Pro M404dn | Pune Office | Working | 8,000 |
For most mid-market manufacturers and service companies, annual physical verification of fixed assets is a clipboard-and-spreadsheet exercise that consumes three to five working days and still misses the four exception classes auditors care about most.
The audit team walks each location with a printed FAR, manually ticks off assets, records condition notes in a separate Excel file, then a senior accountant spends another full day cross-referencing the two files row by row. With 200–500 active asset records spread across multiple branches, a single transposition in an asset code produces a false mismatch that must be traced before the working paper can be signed off.
Missing assets (in the FAR, not on the floor), ghost assets (on the floor, absent from the FAR), location mismatches, and scrapped-condition impairment triggers each require a different resolution path under Ind AS 16 paragraph 67, Ind AS 36, and Companies Act 2013 Schedule II. A manual reconciler applying inconsistent logic across a 400-row spreadsheet will miss at least one class entirely in most audit cycles.
Every statutory auditor signing a Companies Act 2013 audit report must opine on whether physical verification was conducted, whether discrepancies were noticed, and whether those discrepancies were dealt with in the books. An undocumented or incomplete verification forces a qualification or emphasis-of-matter paragraph on clause (xi) — visible to lenders, investors, and the Registrar of Companies in the filed annual report.
Assets barcode-scanned on the floor that have no entry in the FAR represent unrecorded capital expenditure. If uncapitalised, they violate the recognition criteria under Ind AS 16 paragraph 7 and skew both gross block and accumulated depreciation, understating the asset base in financial statements relied on by credit committees during loan renewals and SEBI diligence reviews.
The typical manual post-field reconciliation time for a 200–500 asset FAR spanning three or more branch locations — a workload that shrinks to under 60 seconds with deterministic fixed asset verification automation. Under ICAI SA 501 (Audit Evidence — Specific Considerations for Selected Items), the auditor must obtain sufficient appropriate evidence about physical existence and condition of material fixed assets; a timed, reproducible run record satisfies that requirement in a way manual tick-sheets cannot.
The obligation to maintain, verify, and correctly account for fixed assets flows from four overlapping regulatory frames. Each one creates a discrete obligation that the workflow's exception taxonomy is designed to surface and resolve.
Every auditor signing a Companies Act 2013 statutory report must confirm that the company conducted physical verification of fixed assets at reasonable intervals, whether material discrepancies were noticed, and whether those discrepancies were properly dealt with in the books. An absence of documentation — or a FAR that cannot be matched to a field log — forces a qualification that appears in the filed annual report.
An asset must be derecognised on disposal or when no future economic benefits are expected from its use or disposal. A field observation that an asset is scrapped is precisely such an indication. The resulting gain or loss — typically a loss equal to the remaining written-down value — must be recognised in profit or loss immediately, not deferred to the next period.
When there are indications that an asset may be impaired — including physical evidence that an asset is missing or idle — the entity must estimate the recoverable amount and, where it falls below carrying value, recognise an impairment loss. A FAR-only exception (asset recorded but not found on the floor) is a textbook para 12 indication that cannot be ignored until the next full year-end close.
Schedule II prescribes useful-life-based depreciation for every category of fixed asset, implicitly requiring a complete register. A ghost asset — scanned on the floor but absent from the FAR — represents unrecorded capital expenditure that inflates the apparent asset base in CARO reports and understates gross block and accumulated depreciation in the financial statements reviewed by lenders and auditors.
For companies seeking funding or preparing for a SEBI filing, a qualified fixed-assets clause in the CARO report is a diligence red flag that delays or reprices transactions. US GAAP filers follow ASC 360-10 for long-lived asset impairment; the exception export is structured to supply gross carrying amount and accumulated depreciation needed for both frameworks.
Seven deterministic passes from two XLSX uploads to a CARO 2020 working paper — executing all six reconciliation checks across every asset row in under 60 seconds per audit cycle.
Accepts two XLSX files — the FAR extract (columns: asset_code, description, location, custodian, cap_date, gross_block, acc_depreciation, wdv) and the field Verification Log (columns: asset_code_scanned, location_observed, custodian_confirmed, condition, photo_evidence, verified_date). Cadel classifies each file automatically; no manual labelling is required.
Extracts and normalises all rows from both files, resolving common formatting inconsistencies — trailing spaces in asset codes, inconsistent location name casing, and date format variations — so the matching step operates on clean, comparable values regardless of whether the source is a Tally Prime export, SAP S_ALR_87011990, or a field-team-generated CSV.
Executes a primary join on asset_code, producing three initial buckets: matched records (asset code present in both files), FAR-only records (present in FAR but absent from the field log — the missing asset class, potential write-off candidates under Ind AS 36), and verification-log-only records (present in the field log but absent from the FAR — the ghost asset class, unrecorded additions under Companies Act 2013 Schedule II).
For each matched record, runs five subsidiary checks in sequence: Location Match (FAR location vs. log location_observed), Custodian Match (FAR custodian vs. log custodian_confirmed), Condition Not Scrapped (condition ≠ Scrapped), Photo Evidence Present (photo_evidence = YES), and Verification Recency (verified_date within the current audit window). Each check is evaluated independently and its pass/fail status recorded.
Each exception is tagged with one of four deterministic labels: FAR-only / Missing Asset (write-off candidate — surfaces gross block, accumulated depreciation, and WDV for Ind AS 36 impairment assessment), Verification-log-only / Ghost Asset (unrecorded addition — flags for capitalisation review under Schedule II), Location Mismatch (asset moved without register update), and Impairment Trigger / Scrapped (derecognition required under Ind AS 16 paragraph 67 — quantifies residual WDV exposure).
Records where asset code, location, custodian, and condition all pass and photo evidence is present are marked Verified — No Exception. Records where photo evidence is missing but all other checks pass are marked Partially Verified — Incomplete Evidence and listed separately in the exception report. Stale verification dates raise a Verification Recency warning rather than a hard fail, ensuring the controller is alerted without blocking the rest of the reconciliation.
Generates a verification working paper containing: (a) a reconciliation summary table with counts in each status bucket, (b) a full exception list with asset-level detail and the specific check that failed, and (c) an Excel export formatted for direct attachment to the auditor's CARO 2020 clause (xi) file. The export includes a raw exception tab and a summary reconciliation tab, both reproducible from the same input files under ICAI SA 501 procedures.
A battery of synthetic test scenarios that exercise every failure mode seen in real-world fixed asset data. Each scenario produces a deterministic outcome an auditor or controller can verify in seconds.
Two XLSX files seeded for the Apr-2026 audit window — one FAR extract and one field verification log, sharing asset codes row-for-row with deliberate exceptions planted for every exception class.
Consolidated Fixed Asset Register for Acme Corp Pvt Ltd — 82 asset rows across laptops, servers, network switches, AC units, UPS, and furniture. Each row carries Asset Code, Description, Location, Custodian, Cap. Date, Gross Block, Accumulated Depreciation, and WDV. Source of truth uploaded as the left side of the reconciliation.
One consolidated field Verification Log (barcode / photo) for the same Apr-2026 audit window — 82 scanned rows keyed on the same Asset Codes, with Location Observed, Custodian Confirmed, Condition, Photo Evidence, and Verified Date. Planted exceptions cover: 2 missing assets, 2 ghost assets, 1 location mismatch, 1 custodian mismatch, 1 scrapped-condition impairment trigger, 1 missing photo evidence, and 1 stale verification date.
Uploaded together, the 82-row FAR and the 82-row Verification Log reconcile on Asset Code in a single one-to-one pass, executing all six per-pair checks plus source/target-only detection across the full register.
Roughly 73 assets return a clean Verified — No Exception result with all six checks reading status: match. The remaining rows surface as distinct exception records, each isolated by its failing rule rather than collapsed into a single aggregate mismatch count.
The most operationally significant result is the scrapped-condition row: asset FA-AC-00055 (Voltas 1.5T Split AC) is matched by barcode but the field log records condition = Scrapped and a scrap-yard location while still carrying a positive WDV of ₹12,400 in the FAR. The workflow flags it as an Impairment Trigger / Scrapped exception and surfaces the residual WDV for the write-off schedule — catching exactly the class of error that a manual tick-and-tie most commonly misses when condition notes live in a file separate from the FAR. This is a hard FAIL under Ind AS 16 paragraph 67, requiring immediate derecognition with the loss taken to profit or loss.
Alongside it, the two missing-asset rows appear as FAR-only write-off candidates (FA-PRT-00071 printer, WDV ₹8,000, and one additional server row) and the two ghost-asset rows appear as floor-only unrecorded capex requiring capitalisation review — three different derecognition / capitalisation conclusions reached from a single 60-second reconciliation run. The location mismatch exception (an HP ProLiant server appearing in Chennai Branch rather than Bengaluru HO as the FAR records) and the custodian mismatch are each listed with the FAR-side value and the observed value side-by-side, giving the controller the exact delta to resolve before sign-off.
For a mid-market company with 200–500 fixed assets across three or more branch locations, this fixed asset verification automation replaces a three-to-five day spreadsheet exercise with a single deterministic run that produces the same six checks on every row, every time.
The working paper output — reconciliation summary, full exception list with failing check details, and the Excel export — is structured to drop directly into the auditor's permanent or current-year file. It answers all three CARO 2020 clause (xi) questions (Was verification conducted? Were discrepancies noticed? Have they been dealt with?) without reformatting, satisfying ICAI SA 501 documentation requirements out of the box.
Scrapped-condition flags surface residual WDV values that must be written off under Ind AS 16 paragraph 67 before the financial statements are signed. Catching these in the physical verification run — rather than in the subsequent Ind AS 36 impairment review — eliminates the prior-period adjustment risk that arises when a derecognition that should have happened in Q2 is only discovered during the year-end audit.
The four exception labels and two verification status labels are applied by the same rule set to every row, every time. For a company with assets spread across three or more branches reconciled by different team members at different times, that consistency is what makes the output defensible when the statutory auditor tests the physical verification control under their COSO 2013 control-testing procedures.
The questions finance controllers and statutory auditors ask most often before deploying fixed asset verification automation.
Two files for the same verification round — your Fixed Asset Register (FAR) extract and the field Verification Log from the floor scan. Cadel classifies each automatically, so you can drop them together in the Inbox without labelling them. The FAR should carry columns for Asset Code, Description, Location, Custodian, Cap. Date, Gross Block, Accumulated Depreciation, and WDV; the Verification Log should carry Asset Code (Scanned), Location Observed, Custodian Confirmed, Condition, Photo Evidence, and Verified Date.
Every asset is reconciled on its Asset Code, which appears in both the FAR and the barcode-scanned Verification Log. Rows that match on code are then checked field-by-field for location, custodian, condition, photo evidence, and verification recency. Asset Code Match, Location Match, and Condition-Not-Scrapped are hard FAILs; Custodian Match, Photo Evidence, and Verification Recency are WARNINGs. Anything that fails appears in the Exceptions view with the exact rule that tripped.
A missing asset is in the FAR but was not found on the floor — it appears as a FAR-only (source-only) exception and is a write-off candidate under Ind AS 16 paragraph 67. A ghost asset is the reverse: an asset barcode-scanned on the floor that has no entry in the FAR, surfaced as a verification-log-only (target-only) exception. Ghost assets typically represent unrecorded capex that should be capitalised so the register is complete before the audit. Both types require a controller decision before the CARO 2020 clause (xi) working paper can be signed off.
An asset found on the floor but recorded as Scrapped is still carrying a written-down value in the books. Ind AS 16 paragraph 67 requires derecognition — the asset must be removed from the balance sheet and the loss (equal to the remaining WDV) recognised in profit or loss immediately. The workflow flags the scrapped-condition exception, quantifies the residual WDV, and surfaces it as an impairment trigger so you can post the write-off entry before the audit team begins their procedures. Deferring this creates a prior-period adjustment risk.
A Verified Date in the field log that falls before the current audit window opened means the asset was last seen before this round started. The workflow raises a Verification Recency warning so the asset gets re-scanned rather than carried forward on prior-period evidence. This keeps the working paper aligned with the "reasonable intervals" expectation under CARO 2020 clause (xi) and prevents a single old scan from being reused across multiple audit cycles without triggering a CARO qualification.
The workflow accepts the FAR as a standard .xlsx file. Tally ERP 9 and TallyPrime export the Fixed Asset Register via Display > Account Books > Fixed Asset Register; SAP exports from Asset Accounting (transaction S_ALR_87011990); NetSuite uses the Fixed Assets Management module CSV export. No ERP-specific connector is required — rename or map the column headers in the upload step if they differ from the expected labels. The Verification Log is equally format-agnostic; mobile barcode-scanning apps that export to Excel or CSV work directly without conversion.
Yes. Export the reconciled FAR-vs-log results and the full exception queue to Excel from the Inbox toolbar. The workpaper includes a per-asset reconciliation tab (every check-level match/mismatch status) and an exception tab listing each break with its failing rule, the FAR-side value, and the field-log-side value — structured to drop directly into the auditor's working papers as evidence under ICAI SA 501 (Audit Evidence — Specific Considerations for Selected Items). The output is reproducible from the same input files, satisfying the CARO 2020 clause (xi) documentation requirement.
No. Your documents are processed only to produce this workflow's results and are never used to train any model. Each reconciliation run stores the uploaded FAR filename, the verification log filename, the timestamp of the run, and the individual check-level status for every asset code pair — as an immutable, timestamped audit trail for your own records. The data never leaves the processing environment for training purposes.
