What it is
Testing additions to property and equipment means vouching a sample to invoices and asking whether each item should be capitalized, whether it is recorded in the right period and whether depreciation started on the right date.
This workpaper holds the sample with cost per ledger and per invoice, a capitalization-threshold check, a period check, useful life and approval, and ties the tested items back to total additions on the rollforward.
When to use it
- On audits where PP&E additions are above performance materiality or there was significant construction or acquisition activity.
- Alongside the fixed asset rollforward and the fixed assets audit program.
What’s inside
- Setup: period dates, capitalization threshold and total additions per rollforward
- Test grid with invoice and in-service dates, cost per GL and per invoice, difference
- Formulas for threshold, period and in-service date checks
- Dropdowns for capital / expense, approval, inspection and depreciation start
- Coverage of additions, differences and conclusion
Standard cited
This template follows AU-C 330 / ASC 360. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
What should I look at when testing a large repair expense?
Whether it extended the life, increased capacity or improved the asset. If so it should be capitalized. Also look for a series of smaller invoices that make up a single project.
What date should depreciation start?
Normally when the asset is placed in service and ready for its intended use, not the invoice or payment date. Construction in progress is not depreciated until it is placed in service.
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Last updated 11/04/2026. All free templates.