Process around enterprise asset management
Your guide to the business processes supporting the management of an organization’s assets
offers you in-depth learning resources on Assets, Asset Management, Asset Classification, Investment Management, and Enterprise Asset Management. Build your foundation around asset definition, asset classification, asset lifecycle and management. Learn the systematic process of operating, maintaining and upgrading assets profitably. Acquire the knowledge and skills necessary to apply the principles of internal control to effectively manage assets. Rapidly Improve your knowledge of the latest business processes and industry best practices!
An asset is anything that is likely to provide future economic benefit. Every business must take steps to protect, control and manage the assets it owns. Cash must be managed effectively to protect it and use it effectively. In this section, we will start by understanding what assets are, what are the different asset classifications, and then we will focus on asset management.
“Fixed Assets” is a six-step process and begins with the initiation and approval of the application for the acquisition of the asset and after the maintenance and amortization for the useful life ends with the final disposal of the asset. ‘immobility. These stages are cyclical in nature and most of them occur in any fixed management life cycle. Some optional steps may only occur in certain business scenarios or in specific industries.
In this article, we have explained the meaning and usage of key generic terms that are used in almost all FA management systems / fixed assets processes. Understanding these terms is a prerequisite for gaining a solid understanding of the fixed assets business process.
Most organizations need to manage hundreds or even thousands of physical assets. In such a case, it is important to know the working condition and location of the assets they own at periodic intervals. Identifying, tracking and controlling assets is a critical step in “asset maintenance”.
Before buying an asset in an organization, you must justify the decision to buy the asset and obtain the necessary approvals to invest and release the funds. This series of analysis steps where a cost-benefit analysis is performed to justify the decision to purchase a potential asset is called the capital planning process or simply capital budgeting.
As organizations grow, they need more detailed justification for capital expenditures. This causes many functions to become involved in the fixed asset management process with significant “handoffs” at each step/stage. In this chapter, we will discuss a wide range of issues related to the capital asset process in any large-scale organization.
Physical assets are often on the ground to be used; Undergoing repairs, sold, updated, deleted or stolen. From purchase to disposal and all steps in between, an asset’s history can be easily traced and reviewed using an asset management system that uses asset tags or tags of assets.
Costs related to plant assets that are incurred after the asset is placed in service are either added to the fixed assets account (capitalized) or charged to operations (expensed) when incurred. In this article, we will discuss the principles behind this accounting event.
A fixed asset register (FAR) is an accounting book with a list of fixed assets owned by a particular entity. Traditionally, the fixed assets register was kept in written form by the accountant using a book reserved specifically for monitoring fixed assets. Now, with the advent of computer systems for accounting, it is more often kept in electronic form. Learn the importance of maintaining a FAR.