Asset Management Essay

3. THEROTICAL BACK GROUND.

MEANING.

In corporate finance, asset management is the process of ensuring that a company 's tangible and intangible assets are maintained, accounted for, and put to their highest and best use.

Asset management is the process of guiding the acquisition, use and disposal of assets to make the most of their service delivery potential and manage the related risks and costs over their entire life.

What is Asset Management?

Effective asset management spans every aspect of the asset lifecycle, from initial design and manufacture or purchase, through maintenance, renewal and disposal. With a single source of information, asset management software ensures complete visibility of asset use, performance and location across

 Ultimately determined by the voting public.

FACTORS INFLUENCING ASSET MANAGEMENT

Easy Asset Setup - Create and manage an unlimited number of books of assets for each company, including corporate, federal tax, alternative minimum tax, and more.

Intuitive Interface- Find asset information using an intuitive graphical user interface with one-button access to maintenance, purchase, insurance, lease, book, or other critical information.

Customized Setup-Add up to 15 user-defined fields to track any industry-specific information that you need, set defaults and formats to meet business needs, and hide or display fields as needed.

Asset Tracking- Track comprehensive information about assets using standard or user defined fields, in multiple quantities or by an asset component such as a master ID number or asset suffix.

Asset Classes-Define asset classes to set defaults for a group of assets, as well as set characteristics, such as depreciation or asset retirement, for multiple assets at one time.

Averaging Conventions-Utilize a variety of averaging conventions for managing assets, including averaging by half year, mid quarter, full month, full period, full year, and

Asset Management decline in value over time, so it is essential to conduct a regular review to determine if any assets should be disposed of before they lose their resale value. This review should be conducted at least annually, and should include representatives from the accounting, purchasing, and user departments. An alternative approach is to create capacity utilization metrics (which is most easily obtained for production equipment) and report on utilization levels as part of the standard monthly management reporting package; this tends to result in more immediate decisions to eliminate unused equipment.

 Require a signed capital asset disposition form prior to disposition. There is a risk that employees could sell off assets at below-market rates or disposition assets for which an alternative in-house use had been planned. Also, if assets are informally disposed of, the accounting staff probably will not be notified and so will continue to depreciate an asset no longer owned by the company, rather than writing it off. To avoid these problems, require the completion of a signed capital asset disposition form, such as the one shown in figure