The fixed-asset subledger reconciles to the general ledger on three balances by account: cost, accumulated depreciation and net book value. Done monthly, it is a six-step procedure with a short list of usual differences; done at year-end, it is a project.
Three balances, once a month.
The fixed-asset subledger and the general ledger agree when three balances agree by account: cost, accumulated depreciation, and net book value, which is the difference and is only a check on the first two. The reconciliation is the roll-forward for the month set against the ledger's activity: additions to the debits in the asset accounts, disposals to the credits and to the gain or loss account, depreciation expense to the period's journal, transfers to the reclassifications. A register that produces the journal in the ledger's layout, and a ledger that accepts nothing else into the asset accounts, reconcile in minutes; the exceptions are the interesting part.
| Account | Cost | Accumulated | Net book |
|---|---|---|---|
| 1520 Buildings and improvements | 2,940,000.00 | 1,327,100.00 | 1,612,900.00 |
| 1540 Machinery and equipment | 1,981,500.00 | 1,210,912.40 | 770,587.60 |
| 1550 Vehicles | 588,900.00 | 344,215.50 | 244,684.50 |
| 1560 Computer equipment | 412,280.00 | 301,660.72 | 110,619.28 |
| 1570 Furniture and fixtures | 208,600.00 | 158,921.00 | 49,679.00 |
| 1580 Land improvements | 300,000.00 | 100,000.00 | 200,000.00 |
| Total | 6,431,280.00 | 3,442,809.62 | 2,988,470.38 |
The procedure.
- Close the register's period after the additions queue is empty and the disposals for the month are recorded. Run depreciation for every book.
- Export the journal for the period from the book basis and post it. The journal's total equals the depreciation expense report for the same period and book.
- Run net book value by account from the register and set it against the ledger's trial balance for the asset and accumulated depreciation accounts.
- List every difference by account and find its cause in the table above. A difference is a missing event on one side, not a rounding problem.
- Record the missing events in the register, not the ledger. If the ledger is wrong, reverse the entry and post from the register.
- Keep the reconciliation, signed, with the roll-forward. It is the first thing the auditor asks for at year-end.
| Difference found | Usual cause | Fix |
|---|---|---|
| Cost in the ledger exceeds the register | An addition posted to the asset account and never entered in the register; a repair capitalised in the ledger | Enter the addition or reclassify the expense; check the additions queue |
| Cost in the register exceeds the ledger | A disposal recorded in the ledger (proceeds and gain) and not in the register, or the reverse | Record the disposal event; agree the gain or loss |
| Accumulated depreciation differs by one period's expense | The register's period was closed after the ledger's, or the journal was exported and not posted | Post the journal for the period; confirm the period close |
| Difference equal to a construction-in-progress transfer | The project was capitalised in one place and not the other | Record the capitalisation into assets with the in-service date |
| Small, growing difference | Manual journal entries to the asset accounts outside the register | Route every entry through the register; reverse the manual entries |
Why monthly and not at year-end.
A difference found in the month it arose has one cause. A difference found in January has twelve months of causes stacked on each other, and the year-end roll-forward cannot be finished until they are unpicked. Close teams that reconcile cash and receivables by the third working day and fixed assets by the seventh have found the pace that works; fixed assets are lower risk than cash but higher volume than most people expect. The roll-forward article covers what the auditor tests once the balances tie; the integrations page describes the journal export.
What to record on the asset.
- The period each event belongs to, so that the register and the ledger close the same month.
- The general ledger account and segment on every asset, so net book value by account is a report, not a spreadsheet.
- The journal export for each period and the date it was posted.
- Each reconciling difference, its cause and its resolution, kept with the month.
- Manual entries to the asset accounts, if any survive, with a reason.
In Fixed Asset Desk: the journal report for the period is built from the account map in the ledger's import layout, and net book value by account is a standard report.
Sources: FASB ASC 360-10; AICPA AU-C section 500 (audit evidence); the company's conversion and close experience since 1990. Checked 20 September 2026.