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Fixed Asset Register (FAR) Maintenance in a company is very important so that everything goes well, in addition, it also helps a company in reducing expenses related to fixed assets.
Along with Fixed Asset Register (FAR) Maintenance, Fixed asset management is also required by companies which in turn assists in maintaining fixed asset registers more efficiently. Fixed asset management involves all levels of management and is implemented comprehensively in all departments.
And therefore, to give you a glimpse of this concept, below, we have mentioned some of the reasons why corporate asset management and fixed asset register maintenance are very important.
1. Improve Security
The company’s assets will automatically be protected and safe if the company implements asset management so that this will minimize the risk of damage or loss of company assets.
2. Risk Management
This management is very important because it can create awareness in the company about the dangers of the assets owned by the company. This risk management means a method of managing uncertainty in the form of threats and so on.
3. Facilitate the Preparation of the Construction Budget
Purchase of goods, maintenance of fixed assets to extend the life, and or disposal of company assets will be more easily compiled when asset management has been implemented.
4. Avoiding Over Purchase
Companies with asset management can more easily control asset purchases so that there are no excess purchases.
5. Controlling Depreciation of Assets
Depreciation of assets is one of the risks that inevitably occurs in the use of fixed assets, starting from depreciation to their function. But with asset management, the company will easily control the depreciation that occurs. This asset report is also included in the company’s financial statements because it relates to the value of money owed by the company.
6. Maintaining Asset Value
The company can maintain the value of its assets by performing asset management properly. Damage, loss, and all risks associated with assets can be minimized to maintain a longer asset life.
Your register of fixed assets and depreciation must include the following information:
- The date of acquisition or creation of fixed assets dedicated to professional activity.
- The nature of the asset and its cost price (valuation of the asset)
- Details of the depreciation applied each year for each asset.
- The date and price of the asset’s sale.
- All supporting accounting documents must be kept and brought to the register (purchase invoice for fixed assets or deeds of acquisition or sale invoices).
So, all fixed assets are to be informed, tangible, intangible, and financial, including those which are not depreciable, or which are only partially dedicated to professional use (therefore also partially for personal use). Easier to keep, the fixed assets register only provides information on the fixed asset: durable goods owned by the company. Whatever the nature of the fixed asset, it must integrate the fixed assets register or the balance sheet of the company.