The main purpose of this study assesses the Practices and Challenges of Fixed asset management in the Ethiopian customs commission at the Bahir Dar Branch Office. Good fixed asset management enables better performance in conditions of life cycle management of fixed assets, starting from acquisition, utilization, final process of disposal functions and Specific challenges of fixed asset management. To achieve the research objective; this study used a descriptive research design, both qualitative and quantitative data were used. The data is analyzed using descriptive methods. Both Primary and secondary data were collected from different sources through questionnaires, interviews, researcher observation, and different documents of the Branch . The total target population & sample size of the study were 320 and 178 respectively by using simple random sampling method. During the survey, a total of 178 questionnaires were distributed to employees of the custom commission Bahirdar branch office but 171(96.06%) of the distribution questionnaire were returned. So the analysis was made based on 171 responded questionnaires. The data is analyzed using SPSS statistical tool. The finding of this study revealed that the acquisition, transfer, distribution and disposal performances in the branch office are weak. The internal controlling mechanisms practiced in the branch office are also weak in protection of fixed assets from miss utilization behaviors. Budget limitation, lack of training and development, unskilled manpower, weak coordination between the branch and head office, weak usage of technology & rent dependency are potential challenges in the branch office for proper property administration.Finally, the researcher recommended that branch office should examine the pre need assessment plan of fixed assets before acquisition, transfer, distribution, and motivated & committed disposal committee/ property officer shall be established for timely dispositions. Well planned & sufficient amount of financial resources, consistent training program, proper utilization of technology, to build up building offices & the communication & coordination between IFMIS technical support staff should be practiced in the branch office.Good management monitoring & evaluation activities, trained and adequate staffs for internal auditor departments are important tools to strengthen internal controlling mechanisms in the office.