Which directive requires the maintenance of a fixed asset accounting and reporting system?

Which directive requires the maintenance of a fixed asset accounting and reporting system?

• A. Directive No.1.
• B. Directive No.3.
• C. Directive 85-3.
• D. Directive 85-2.

Answer: (D)

The essential idea is that a fixed asset accounting and reporting system is needed to track all capital assets through their life cycle—from purchase and capitalization to depreciation, disposals, and current location—so financial statements are accurate and assets are properly controlled. Directive 85-2 is the one that specifically requires maintaining this fixed asset system, ensuring consistent recording, valuation, and reporting of capital assets. The other directives govern different areas of financial management (such as procurement, cash handling, or revenue and expenditure controls) and do not mandate the fixed asset tracking system in the same explicit way, which is why the directive focused on fixed assets is the best choice.

The essential idea is that a fixed asset accounting and reporting system is needed to track all capital assets through their life cycle—from purchase and capitalization to depreciation, disposals, and current location—so financial statements are accurate and assets are properly controlled. Directive 85-2 is the one that specifically requires maintaining this fixed asset system, ensuring consistent recording, valuation, and reporting of capital assets. The other directives govern different areas of financial management (such as procurement, cash handling, or revenue and expenditure controls) and do not mandate the fixed asset tracking system in the same explicit way, which is why the directive focused on fixed assets is the best choice.