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What is good management of assets? How will it affect your business? Do you need fixed asset register (FAR) maintenance services? Well, we will go by parts. Properties, plants, and equipment all these things remain active in a company, the latter is also used in the production of both goods and services.
If you have the correct information about your fixed assets, you can not only analyze the past but also monitor the present, and here comes the best of all: programming the future, from what? Well, investments, whether short or long term, all thanks to fixed asset register (FAR) maintenance.
How to manage your assets correctly? For this, you must consider the needs of your own business. In the asset management of your organization, in any case, your company must make an analysis of its economic relevance and, in turn, determine a strategic plan. What will it allow? Place control mechanisms so that the real existence of the asset can be validated, in addition to comparing those data in an accounting manner at any time and knowing that everything is in order and up to date.
Some recommendations
What can we recommend on asset management issues? The documentation, both policies, and procedures, what for? For the acquisition, capitalization, maintenance, transfers, cancellations, improvements, registration, and updating of assets in your company and in which the following terms are established:
- Roles, approval levels, and responsibilities are about the parties involved in all the processes that are related to the management of your company’s assets.
- Establish both criteria and defined controls for the acquisition, improvement, and cancellation of assets and identity.
- Place defined parameters, either for the registration and control of assets, and all this at the accounting level.
Accurate information
In any case, it is important to have information that is not only reliable but also accurate on asset management issues. That’s right, you must count and have the main data, such as the code, status, description, physical location, depreciation, value, useful life, residual value and so the list goes on.
How do you deal with the sale of fixed assets?
When you sell your professional property, you will notice gain, a loss, or a zero transaction in your fixed asset register. To calculate this, the purchase price of the asset concerned is taken and the total amount of depreciation charged on the asset in past is deducted: you thus obtain the “net book value”, and then deduct it from the sale price. If the result is:
- Equal to zero, the property is fully depreciated, there is no resale, no gain or loss,
- Positive, you have added value, you will then see a product,
- Negative, you have a loss, you will then see a charge.
The capital gain will be taxed at the same tax rate as your profits. The loss will come in a reduction of your profit. To post this sales transaction:
- You enter the net book value in the income statement,
- You transfer the selling price in the income statement.
- Finally, you will enter the sale of the property, its price, and date in your register of assets, and the line of capital will no longer exist.