Asset value

The commercial sector is facing up to the forthcoming shift to IFRS with mixed emotions about what the business benefits will be. The implications across the board are significant, but for the management of the asset base, the changes will have a fundamental impact on operational processes and the administrative overhead.

But the most significant issue is that the process will create far more individual asset records and far more complex registers. This will create audit challenges and constrain the desire to improve operational performance through effective utilization of assets and budget. It takes visibility of the bigger picture to really appreciate the long-term benefits that specialized asset accounting and IFRS will bring.

The fixed asset register is key to business value in many ways. Disaster recovery strategies, business continuity plans, insurance claims and due diligence during a merger or acquisition all begin with the information recorded in the asset register. Those businesses that recognize the need for a tailored asset management solution rather than a massive spreadsheet will not only enable maximum asset utilization and achieve a reduction in administrative cost but will be in a very strong position when the economy swings around again.