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Assurance services can do more than verify financial statement accuracy or mitigate operational risk. Wipfli leverages our strong CPA foundation to deliver the assurance you need, plus extra value and insights you can use to strengthen performance.
From audit readiness and assistance with adopting new accounting standards to financial statement preparation and analysis, Wipfli accountants can look beyond the numbers to deliver greater value to your organization.
The highest level of assurance helps build stakeholder trust and accountability. With Wipfli’s audit and assurance services, you can not only leverage best practices and better risk management but also gain a clear and verified picture of your operations.
Get the high-level knowledge of an experienced financial team — without the back-office staffing challenges. Our innovative team takes ownership of your finances, helping you focus on maintaining a growth trajectory.
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EVENT | December 9, 2026
CFO Roundtable: Prepare your financial institution for 2027 and beyond
Staying compliant today requires looking ahead to the regulatory and reporting expectations of tomorrow. Join us from 12:30-2:00 pm CT on December 9 for the CFO Roundtable, a forward-looking learning opportunity for chief financial officers, chief risk officers and other accounting leaders. This two hour session will provide strategic clarity on key audit, accounting and tax developments to help your institution prepare for 2027 and beyond. Proactively preparing for change helps your institution maintain a competitive advantage. Join us for the context and practical guidance needed to lead your team with clarity and confidence. Save your seat today.
WEBINAR | October 8, 2026
Nexus studies and voluntary disclosure agreements: How to manage multistate tax exposure
You could be exposed to state tax liabilities you don’t know about. State tax nexus can be triggered by a single remote employee, inventory stored in a third-party warehouse or simply crossing an economic sales threshold. This webinar explores two of the most critical — and most frequently misunderstood — tools in multistate tax compliance: Nexus studies and voluntary disclosure agreements (VDAs).
ARTICLE
A guide to fixed asset accounting
Fixed assets represent some of the largest investments on a company’s balance sheet, and how you account for them directly affects financial reporting accuracy, audit readiness and the reliability of key performance metrics. From initial capitalization to depreciation, impairment and disposal, each stage of the fixed asset life cycle carries distinct accounting requirements under GAAP. Keep reading for an in-depth guide to fixed asset accounting best practices. What is fixed asset accounting? Fixed asset accounting is a crucial aspect of financial management that deals with tangible assets, also known as property, plant and equipment (PP&E). These assets, which appear on the balance sheet, cannot be easily converted into cash. The term “fixed” indicates that these assets will not be used up, consumed or sold in the current accounting year. Understanding what fixed asset accounting entails is essential for businesses, as virtually all companies have a fixed asset investment. Fixed assets are used in the production of goods and services for customers. This investment can range from a single laptop to a fleet of trucks, an entire manufacturing facility or an apartment building for rent. The fixed asset life cycle, from acquisition to disposal, plays a significant role in a company’s financial statements and overall financial health. Fixed asset accounting do’s and don’ts Here is a short list of fixed asset accounting do’s and don’ts with detailed explanations: Do: Consider all costs at the time of acquisition or construction, including capitalization of sales tax on fixed assets and freight costs. Adopt a fixed asset capitalization policy with a clear capitalization threshold. Estimate useful life for depreciation based on an asset’s estimated service life. Consider whether the asset will have value at the end of its service life, then base depreciation on cost, less estimated salvage value. Reevaluate estimates of useful lives of assets on an ongoing basis. Keep asset depreciation records in sufficient detail so they can be accurately tracked when physically moved and/or disposed of. This includes maintaining a fixed asset schedule and performing regular fixed asset roll-forwards. Consider asset impairment when significant events or changes in circumstances occur. Be aware of changes forthcoming with new lease accounting standards, particularly regarding right-of-use assets. Don’t: Expense costs such as sales tax or freight incurred on a fixed asset purchase, as these can typically be capitalized. Use depreciable lives based on IRS rules for financial reporting purposes. Ignore changes in an asset’s use or service; you may need to consider asset impairment. Automatically depreciate a leased asset over its useful life; consider lease accounting to determine proper life. Forget to consider insurance recordkeeping requirements when recording and tracking fixed assets. Fixed asset accounting rules and policy For most businesses, fixed assets represent a significant capital investment, so it’s critical that the accounting be applied correctly. Here are some key facts to understand and insights to keep in mind: Fixed assets are capitalized: That’s because the benefit of the asset extends beyond the year of purchase, unlike other costs, which are period costs benefitting only the period incurred. Understanding what it means to capitalize an asset is crucial for proper fixed asset accounting. Fixed assets should be recorded at the acquisition cost: Cost includes all expenditures directly related to the acquisition or construction of and the preparations for its intended use. Such costs as freight, sales tax, transportation and installation should be capitalized. Adopt a capitalization policy establishing a dollar amount threshold: Fixed asset costs below the threshold amount should be expensed. This is part of the criteria for capitalization of fixed assets. Assets constructed by the entity should include all components of cost: This includes materials, labor, overhead and interest expense, if applicable. Capitalize additions that increase the service potential of the asset: Additions better categorized as repairs should be expensed when incurred. Capitalizing fixed asset costs for software Capitalized costs for software consist of: The fees paid to third parties to purchase and/or develop software. Fees for the installation of hardware and testing, including any parallel processing phase. Costs to develop or purchase software allowing for the conversion of old data are also capitalized. However, the data conversion costs themselves are expensed as incurred. Training and maintenance costs, which are often a significant portion of the total expenditure, are expensed as period costs. Upgrade and enhancement costs should be expensed unless it is probable they will result in additional functionality. Capitalized costs Expensed costs · Fees paid to third parties for purchase or development · Hardware installation and testing fees · Software used to convert old data · Data conversion costs · Training · Maintenance · Upgrades and enhancements When an organization purchases software from a third party, the purchase price may include multiple elements, such as: Software training costs Fees for routine maintenance Data conversion costs, reengineering costs Costs for rights to future upgrades and enhancements Such costs should be allocated among all individual elements, with allocations based on objective evidence of the fair value of the contract elements, not necessarily the separate prices for each element stated in the contract, and then capitalized and expensed accordingly. GAAP includes specific guidance for accounting for the costs of computer software purchased for internal use. The ins and outs of asset depreciation Depreciation is the process of allocating the cost of the asset to operations over the estimated useful life of the asset. For financial reporting purposes, the useful life is an asset’s service life, which may differ from its physical life. An asset’s estimated useful life for financial reporting purposes may also be different than its depreciable life for tax reporting purposes. Furthermore, the objectives of financial reporting and tax depreciation are different; generally, tax methods and lives take advantage of rules that encourage investments in productive assets by permitting a faster write-off, whereas depreciation for financial reporting purposes is intended to match costs with revenue. The service life for financial reporting is an estimate made by management, considering some of the following factors: Type of asset Condition when purchased: new or used Past experience Expected usage: normal or excessive Expected obsolescence The service life may be based on industry standards or specific to a business, based on how long the business expects to use the assets in its operations. Certain assets may be used until they are worthless and are disposed of without remuneration, while others may still have value to the business at the end of their service life. If an asset will have a residual value at the end of its service life that can be realized through sale or trade-in, depreciation should be calculated on the cost less the estimated salvage value. Real-world depreciation scenario Most businesses use five years as the useful life for automobiles. In practice, a particular business may have a policy of purchasing and trading in automobiles every three years. In this case, three years, not five, should be the estimated useful life for depreciation, but the trade-in value must be estimated and used in the calculation of depreciation (the cost, less the estimated salvage value, should be depreciated over the three-year service life to the business). As with all accounting rules, materiality should be considered in determining whether the recognition of residual values is needed. While the straight-line method is the most commonly used depreciation method, other methods such as units of production, sum of the years’ digits and declining balance (including the double-declining balance method) exist. As estimates, useful lives should be evaluated during an asset’s life, and changes should be made when appropriate. Changes in estimates are accounted for prospectively. Net fixed assets and the fixed asset turnover ratio The net fixed assets formula is a crucial concept in fixed asset accounting. Net fixed assets are calculated by subtracting accumulated depreciation from the original cost of all fixed assets. This figure appears on the balance sheet and is used in various financial analyses, including the calculation of the fixed asset turnover ratio. The fixed asset turnover ratio is a measure of how efficiently a company uses its fixed assets to generate sales. It’s calculated by dividing net sales by average net fixed assets. This ratio is particularly useful for companies with significant investments in property, plant and equipment. Impairment testing best practices for accounting Fixed assets should be tested for impairment individually, or as part of a group, when events or changes in circumstances indicate an asset’s carrying value may exceed its gross future cash flows. Such circumstances include the following: A significant decrease in the market price of the asset A significant adverse change in the degree or manner in which the asset is being used Significant deterioration in the asset’s physical condition An accumulation of costs significantly exceeding the amount originally expected for the acquisition or construction of the asset An operating loss in the current period and a history of losses indicate that future ongoing losses associated with the use of the asset will occur Keep in mind that impairment accounting applies when a significant asset, or a collection of assets, is not as economically viable as originally thought. Isolated incidents when a particular asset may be impaired are usually not material enough to warrant recognition. In those cases, a change in an asset’s estimated life for depreciation may be all that is needed. Impairment is typically a material adjustment to the value of an asset or collection of assets. It is, in essence, an acceleration of depreciation to account for the lower future benefits to be received from the asset. The charge for impairment is recorded as part of income from operations in the same section of the income statement as depreciation. Fixed assets accounting entries and journal entry examples Understanding fixed assets accounting entries is crucial for proper financial reporting. Here are some fixed asset journal entry examples: Acquisition of a fixed asset: fixed asset cash or accounts payable Recording depreciation: depreciation expense accumulated depreciation Sale of a fixed asset: cash accumulated depreciation fixed asset gain on sale of asset (if applicable) Asset disposal: accumulated depreciation loss on asset disposal (if applicable) fixed asset These entries help maintain accurate records in the fixed asset schedule and facilitate the fixed asset roll forward process. If your business leases fixed assets Not all fixed assets are purchased by a business. Most businesses use both purchasing and leasing to acquire fixed assets. Under current accounting rules, assets under capital leases are capitalized by the lessee. Depreciable lives of assets under capital leases are generally the asset’s useful life (for leases with a transfer of ownership to the lessee at the end of the lease) or the term of the related lease (for all other capital leases). Leases of real estate are generally classified as operating leases by the lessee; consequently, the leased facility is not capitalized by the lessee. However, improvements made to the property — termed leasehold improvements — should be capitalized when purchased by the lessee. The depreciation period for leasehold improvements is the shorter of the useful life of the leasehold improvement or the lease term (including renewal periods that are reasonably certain to occur). The current FASB standard for lease accounting is ASC 842 (Leases). This standard was issued to improve financial reporting about leasing transactions and requires organizations that lease assets (referred to as “lessees”) to recognize on the balance sheet the assets and liabilities related to the rights and obligations created by those leases. Accounting solutions for fixed asset management Maintaining complete and up-to-date fixed-asset records isn’t easy, and if you are preparing for an audit, fixed-asset management can be an intimidating prospect. But it doesn’t have to be. Professional accounting firms are ready to partner with you to help ensure accuracy in the accounting of your fixed assets. Understanding fixed asset accounting, from initial recognition to depreciation and eventual disposal, is crucial for accurate financial reporting. By following GAAP fixed asset capitalization rules, maintaining a detailed fixed asset schedule, and regularly performing fixed asset roll forwards, businesses can help ensure their balance sheet and income statement accurately reflect their fixed asset investments and related expenses. Read more 5 signals your capital deployment strategy is out of sync with your business Capital allocation performance self-check: 5 questions leadership teams should ask before committing additional investment Why FP&A is essential for business growth and profitability
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Assurance services FAQ
Assurance services are professional services that help organizations maintain compliance with audit requirements and accounting standards, adhere to contractual obligations and identify potential risks.
With the right assurance support, organizations can improve compliance and provide transparent, accurate information to decision-makers and stakeholders.
Wipfli’s assurance services include:
- Financial assurance services, including financial statement audits and reviews
- Single audits and Uniform Guidance
- Internal audits
- Employee benefit plan audits
- SOC audits
- Other attestation services
- Accounting assurance services for areas including technical accounting, financial planning and analysis, financial statement compilation and preparation assistance, IPO and audit readiness
- Outsourced finance and accounting services
If you know an audit is on the horizon, Wipfli can also help you prepare. We offer audit readiness services to help ensure your financials meet the required standards and provide peace of mind before the process begins.
Our team can augment your existing staff during preparation, giving you the extra support you need. And when readiness is complete, Wipfli can seamlessly transition to performing the audit itself, creating a smoother experience from preparation to reporting.
Wipfli incorporates technology into our assurance process to help deliver audits that are efficient and offer deeper insight into your operation.
We leverage technology to help automate and customize your audit experience, as well as give you access to valuable data and collaborate in real time. We can also perform paperless audits, allowing us to reduce the amount of paperwork needed in your audit and make the process easier for your teams and ours.
Wipfli has experience supporting organizations in a wide range of industries, including financial services, financial institutions, nonprofits, construction, healthcare and manufacturing.
Our technical accounting services provide the specialized knowledge you need to maintain GAAP compliance and address complex requirements with confidence. From navigating new lease guidance to delivering robust financial planning and analysis, we help you stay ahead of evolving, industry-specific standards.
We also offer international tax services — including international tax consulting, compliance and reporting — to help you navigate
multinational tax and financial reporting challenges
The duration of the audit process depends on several factors, including the size of your organization and the exact audit services proposed.
Wipfli knows that for many organizations, complex, time-consuming audits can make meeting compliance while minimizing disruption uniquely challenging. Our audit process is designed to be efficient and mindful of your team’s workload.
Our team strives to respect your team’s capacity, planning a strategic audit timeline and often performing preliminary testing on certain accounts and transactions early so that you can stay focused on high-value work.
To deliver services effectively, we also collaborate closely with your key financial leaders so that questions are answered and support is provided without unnecessary disruption.
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From identifying opportunities to addressing risks, Wipfli is ready to help you plan for what’s next while maintaining transparent, compliant operations.
