Fixed assets management
Encyclopedia
Fixed assets management is an accounting process that seeks to track fixed asset
s for the purposes of financial accounting, preventive maintenance
, and theft
deterrence.
Many organizations face a significant challenge to track the location, quantity, condition, maintenance and depreciation
status of their fixed assets. A popular approach to tracking fixed assets utilizes serial numbered Asset Tags
, often with bar codes for easy and accurate reading. Periodically, the owner of the assets can take inventory with a mobile barcode reader and then produce a report.
Off-the-shelf software packages for fixed asset management are marketed to businesses small and large. Some Enterprise Resource Planning
systems are available with fixed assets modules.
Some tracking methods automate the process, such as by using fixed scanners to read bar codes on railway freight cars or by attaching a radio-frequency identification (RFID) tag to an asset.
With advancements in technology, asset tracking software is now available that will help any size business track valuable assets such as equipment and supplies. According to a study issued in December, 2005 by the ARC Advisory Group, the worldwide market for Enterprise Asset Management (EAM) was then at an estimated $2.2 billion and was expected to grow at about 5.0 percent per year reaching $2.8 billion in 2010.
Asset tracking software allows companies to track what assets it owns, where each is located, who has it, when it was checked out, when it is due for return, when it is scheduled for maintenance, and the cost and depreciation of each asset.
The reporting option that is built into most asset tracking solutions provides pre-built reports, including assets by category and department, check-in/check-out, net book value of assets, assets past due, audit history, and transactions.
All of this information is captured in one program and can be used on PCs as well as mobile devices. As a result, companies reduce expenses through loss prevention and improved equipment maintenance. They reduce new and unnecessary equipment purchases, and they can more accurately calculate taxes based on depreciation schedules.
The most commonly tracked assets are:
Fixed asset
Fixed assets, also known as a non-current asset or as property, plant, and equipment , is a term used in accounting for assets and property which cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, which are described as liquid assets...
s for the purposes of financial accounting, preventive maintenance
Preventive maintenance
Preventive maintenance has the following meanings:#The care and servicing by personnel for the purpose of maintaining equipment and facilities in satisfactory operating condition by providing for systematic inspection, detection, and correction of incipient failures either before they occur or...
, and theft
Theft
In common usage, theft is the illegal taking of another person's property without that person's permission or consent. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting and fraud...
deterrence.
Many organizations face a significant challenge to track the location, quantity, condition, maintenance and depreciation
Depreciation
Depreciation refers to two very different but related concepts:# the decrease in value of assets , and# the allocation of the cost of assets to periods in which the assets are used ....
status of their fixed assets. A popular approach to tracking fixed assets utilizes serial numbered Asset Tags
Label
A label is a piece of paper, polymer, cloth, metal, or other material affixed to a container or article, on which is printed a legend, information concerning the product, addresses, etc. A label may also be printed directly on the container or article....
, often with bar codes for easy and accurate reading. Periodically, the owner of the assets can take inventory with a mobile barcode reader and then produce a report.
Off-the-shelf software packages for fixed asset management are marketed to businesses small and large. Some Enterprise Resource Planning
Enterprise resource planning
Enterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
systems are available with fixed assets modules.
Some tracking methods automate the process, such as by using fixed scanners to read bar codes on railway freight cars or by attaching a radio-frequency identification (RFID) tag to an asset.
Fixed Asset Tracking Software
Tracking assets is an important concern of every company, regardless of size. Fixed assets are defined as any 'permanent' object that a business uses internally including but not limited to computers, tools, software, or office equipment. While employees may utilize a specific tool or tools, the asset ultimately belongs to the company and must be returned. And therefore without an accurate method of keeping track of these assets it would be very easy for a company to lose control of them.With advancements in technology, asset tracking software is now available that will help any size business track valuable assets such as equipment and supplies. According to a study issued in December, 2005 by the ARC Advisory Group, the worldwide market for Enterprise Asset Management (EAM) was then at an estimated $2.2 billion and was expected to grow at about 5.0 percent per year reaching $2.8 billion in 2010.
Asset tracking software allows companies to track what assets it owns, where each is located, who has it, when it was checked out, when it is due for return, when it is scheduled for maintenance, and the cost and depreciation of each asset.
The reporting option that is built into most asset tracking solutions provides pre-built reports, including assets by category and department, check-in/check-out, net book value of assets, assets past due, audit history, and transactions.
All of this information is captured in one program and can be used on PCs as well as mobile devices. As a result, companies reduce expenses through loss prevention and improved equipment maintenance. They reduce new and unnecessary equipment purchases, and they can more accurately calculate taxes based on depreciation schedules.
The most commonly tracked assets are:
- Plant and equipment
- Buildings
- Fixtures and fittings
See also
- AssetAssetIn financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
- Infrastructure Asset ManagementInfrastructure asset managementInfrastructure asset management is the integrated, multi-disciplinary set of strategies in sustaining public infrastructure assets such as water treatment facilities, sewer lines, roads, utility grids, bridges, and railways. Generally, the process focuses on the later stages of a facility’s life...
- Fixed Assets Register (FAR)Fixed Assets RegisterA fixed asset register is an accounting method used for major resources of a business.Fixed assets are those such as land, machines, office equipments, buildings, patents, trademarks, copyrights, etc...
- Radio-frequency identification (RFID tags are being used for automatic asset management)
- Computerized Maintenance Management SystemComputerized Maintenance Management SystemComputerized maintenance management system is also known as enterprise asset management and computerized maintenance management information system ....