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Fixed asset is the main element of the property potential of the organization. Improving the use of fixed assets is one of the factors in stabilizing economic growth.
If the fixed assets does not correspond to the equipment of the physical volume of activity, this negatively affects the level of potential in general, ensuring social and economic efficiency
The insufficient size of material and technical resources limits the growth of volume indicators, worsens the quality indicators of public service, and prevents the achievement of the organization’s goals.
On the contrary, excessive material and technical resources exceeding the required volume of activity cause an increase in stranded costs and have a detrimental effect on financial results.
The study of domestic and foreign experience in the theory and practice of fixed asset management confirms the need to consult a fixed asset management company specialized in the managerial activities.
The analysis of fixed assets can be carried out in several directions, the development of which in combination makes it possible to assess the structure, dynamics and efficiency of the use of fixed assets and long-term investments.
Measures to ensure an increase in the efficiency of the use of fixed assets can be considered as measures to reduce the need for their financing and increase the pace of economic development of the organization through more rational use of their own financial resources.
The rational management of fixed assets has several advantages. The reliable and precise identification of the goods constituting the fixed asset facilitates periodic physical and accounting inventories and allows a better adjustment with reality (goods out of service, disposals, disappearances, thefts, etc.)
Constant knowledge of maintenance and insurance costs also makes it easier to terminate contracts once the asset has been sold or taken out of service.
In addition, the monitoring of transfers of goods between establishments and/or sections integrates the rational inclusion of endowments in the analytical calculation of cost prices.
The basis for calculating the business tax and the municipal services tax is optimized, thanks to the application of the provisions for exemption, cost reduction, reduction of coefficients, etc. which often generates substantial savings!
New international accounting standards
The adoption of international accounting standards (IAS) and international financial reporting standards (IFRS) impose a new vision of fixed assets and disrupt their management.
In fact, following the adoption of IFRS standards, companies having to migrate to the international standard must set up real asset management and analyze all aspects of the management of fixed assets that will be affected by the standards.
The implementation of dynamic management of fixed assets requires an organized and thoughtful approach which must be structured in project mode. Most often, this requires structured support as well as the support of all the stakeholders within the company.
The main stages of the dynamic management of fixed assets
- Review and reconstruction of the detailed file of fixed assets.
- Realization of an exhaustive physical inventory and reconciliation with accounting data.
- Establishment of asset management procedures.
- Establishment of an information system for the management of fixed assets presenting the functionalities necessary for the accounting and operational monitoring of the company’s assets, in accordance with local standards and IFRS.