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Property inventory is a listing of all assets and property owned by an individual or a business operation. A list of this type will include information regarding the nature, current value, and purchase price of each asset. It is not unusual for a property inventory list to be maintained as a reference document for preparing tax returns, or for purposes of insuring assets.
The exact structure of a property inventory will vary slightly, depending on governmental regulations that may require certain data to be included in any records used as supporting documentation for gains and losses reported on tax returns. Several types of data are included in just about every example of this type of listing. A brief but accurate description of each asset is included, along with the original purchase price and the date of purchase. The current assessed value of each asset is also included in the inventory detail.
Hard copies of the most recent inventory are often kept in a secured location, such as a bank deposit box. Today, it is not unusual for an electronic copy to be placed into some type of remote data storage facility. This makes it possible to access the list even if a company’s main facility is damaged due to some type of natural disaster.
One of the more important functions of a property inventory is to aid individuals and businesses in tracking the current worth of assets, making it easier to document each gain or loss that is incurred throughout the tax year. Maintaining a running tally of changes in the most recent assessed value of each asset makes it possible to calculate gains and losses as the assets are sold, and calculate any taxes that may be due as result of those transactions. Companies often use a specific template for this type of list, making it easy to make changes to the listing when and as needed to keep the data current.
Along with use in maintaining accurate data for tax purposes, a property inventory is also helpful in updating insurance companies in any change to the status of an insured asset. That change may be due to the recent sale of the asset or the acquisition of an asset that needs to be included in the coverage. The information that is routinely included on a property inventory is also helpful when assets are damaged or stolen, as that same data is normally required when filing a claim with the insurer.
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