http://www.realassetmgt.com/blog Transforming Assets into Business Advantage Thu, 02 Sep 2010 14:59:07 +0000 http://backend.userland.com/rss092 en For a complete picture of an organization’s finances, it must take into consideration its fixed assets.  If an organization does not currently have a method for tracking its fixed assets, it may be unknowingly opening itself to a loss through theft, improperly maintained equipment or inaccurate information regarding leased assets.    The ... http://www.realassetmgt.com/blog/902/fixed-asset-management-deter-theft/ Business Activity Monitoring (BAM) software is much like having an “invisible assistant.”  It monitors databases for tailored situations and events.  A BAM tool can be beneficial by providing users with immediate notices when user-specified data relationship situations occur, such as when an asset’s insurance renewal is due, when a warranty ... http://www.realassetmgt.com/blog/899/benefits-business-activity-monitoring/ It's unlikely that you would want to store every nut and bolt in your inventory register.  However, you do want to make sure that you have the information required to easily identify inventory items.  This can be done in conjunction with your inventory register through comprehensive stores management.  It will monitor and manage all ... http://www.realassetmgt.com/blog/897/storesmanagement/ Precise fixed asset data is essential to most institutions including higher education.  Reliable fixed asset records enable business officials to protect the investments of the college or university.  From providing values for insurance coverage to reporting requirements and financial statements, proper fixed asset management is a key factor in formulating ... http://www.realassetmgt.com/blog/894/fixed-asset-accounting-higher-education/ Corporate tax regulations implemented by the IRS and the United States Department of the Treasury are constantly requiring enhanced levels of accountability from finance executives.  If organizations are using complex and inaccurate multi-book spreadsheets, its time to eliminate them and consider the advantages of a fixed asset management system with the ... http://www.realassetmgt.com/blog/891/tax-compliance/ ‘Parent/child’ relationships provide the ability to group fixed assets in such a way that assets which are dependent on another asset are set up as a ‘child’ and the asset it depends on is the ‘parent’.  An example of this is the association between a PC and software license, where ... http://www.realassetmgt.com/blog/889/fixed-asset-parent-child-relationships/ After completing a physical audit, it is time to organize the findings.  If this is the first time an audit has been carried out, there might be some cleaning up to do.  It is typical for an organization to discover that is has 15% ghost assets – items that are on ... http://www.realassetmgt.com/blog/886/reconciling-physical-audit-results/ The manual method of conducting a physical audit can be very time consuming as the auditor has to flip through pages searching for fixed assets' descriptions and serial numbers in order to identify the particular item that s/he is standing in front of.    Another major drawback with the manual method is that the auditor ... http://www.realassetmgt.com/blog/883/physical-audit-methods-manual-barcode/ Today we explore two of the problems that arise when organizations depend on spreadsheets for asset management: inaccurate depreciation calculations and a lack of confidence in data integrity.   Inaccurate depreciation calculations Too many spreadsheets contain errors, which is to be expected when information is entered by hand.  Whether it be the background ... http://www.realassetmgt.com/blog/880/spreadsheets-sufficient-asset-management-tool/ You can now follow us on twitter for the latest and most up-to-date information about GAAP, GASB, new white papers available , product launches and tips and tricks for managing your fixed assets.  Plus, be among the first to know when we’ve updated our blog posts for more in-depth asset ... http://www.realassetmgt.com/blog/876/real-asset-management-twitter/ With increased pressure on organizations of all types to ‘do more with less’, communication and transparency between departments is an important part of streamlining business processes.  A central asset register can not only help streamline your asset maintenance, but it also provides that desired increased transparency and easier communication between departments.  ... http://www.realassetmgt.com/blog/871/streamlining-assets/ One of the most tangible ROI realizations for businesses that implement a specialist asset management system can be a dramatic lowering of insurance premiums and more successful insurance claims.  Many companies deal with escalating insurance premiums.  However, in reality, the majority are actually over insured.  Endemic failure to maintain accurate ... http://www.realassetmgt.com/blog/868/accurate-asset-registers-insurance/ The second step an organization should take when planning a physical audit is to review and consolidate the data.  Utilizing a specialist asset management system makes this simple.  It should be easy to generate a report from your asset register to include the asset reference, description and location of the items ... http://www.realassetmgt.com/blog/864/step-conducting-physical-audit/ Organizations need to determine what assets will be included in the audit.  Is it going to be solely based on the capital asset policy or will it also include expensed items which fall below the capitalization threshold? Some expensed items are categorized as ‘portable and attractive’ and are therefore sometimes included ... http://www.realassetmgt.com/blog/861/step-planning-physical-audit/ Whether assets are maintained on a spreadsheet or on a professional asset management system, the credibility of an organization's data (the existence of assets and their Net Book Values) will be in question if it cannot verify them.  As a result, an organization can be over or under reporting the ... http://www.realassetmgt.com/blog/858/potential-risks-conducting-regular-physical-audits/  What is the ARRA? The American Recovery and Reinvestment Act (ARRA), which is commonly referred to as the Stimulus or The Recovery Act, is an economic stimulus package enacted in February 2009 and  was designed to create new jobs, save existing jobs, spur economic activity, and foster unprecedented levels of accountability ... http://www.realassetmgt.com/blog/855/simplify-arra-asset-reporting-tracking/ Organizations typically categorize fixed assets into distinct groups, four of which include land, land improvements, buildings and building improvements. Land that is purchased or donated is usually capitalized but not depreciated.  Land can be recorded at, and remain at, historical cost.  When land and a building are acquired as a package, most organizations will ... http://www.realassetmgt.com/blog/852/categories/ If you’re still conducting pen and paper audits verifying the existence and location of individual assets and inventory items it can be both difficult and time-consuming.  As a result, audits are often regarded as tedious tasks and are carried out as infrequently as possible.  Without regular audits, register information can ... http://www.realassetmgt.com/blog/849/independence-pen-paper-audits/ Fixed Assets are sometimes referred to as Property, Plant and Equipment (PP&E) and the terms are used interchangeably.  In many companies the following elements of Internal Control over PP&E are considered and performed according to standard guidelines: Approval process for Capital Expenditures (Capex) Determination whether planned expenditure is capitalized or expensed Purchasing and ... http://www.realassetmgt.com/blog/847/elements-internal-control-fixed-assets-2/ Since the adaptation of more stringent reporting requirements such as GASB 34, one of the more time-consuming tasks for school and district administrators has been maintaining accurate asset registers. Unfortunately, studies have shown that as much as 50 percent of an organization’s listed assets are no longer in use, are ... http://www.realassetmgt.com/blog/843/rfid-school-administration/ For most people, RFID (radio frequency identification) is most readily recognizable as the tiny tags placed in or on an item that helps determine its location.  Examples of widespread RFID usage include automated toll road payment systems, ID cards, passports and retail functions.  The technology evolved out of retail store security methods ... http://www.realassetmgt.com/blog/841/managing-assets-rfid/ A fixed asset register should provide five types of asset events.  These are designed to cope with any changes during an asset's life time.  The five events include: Asset acquisitions - to capitalize new assets in the register Asset transfers - to move assets into, out of, and within the register Asset relifes ... http://www.realassetmgt.com/blog/838/events/ If your company is still using spreadsheets its time to ask yourself if you've outgrown them.  Fixed asset management can be complex and spreadsheets leave you open to time consuming and costly mistakes.  If you are experiencing any of the following it may be time to consider your alternatives to ... http://www.realassetmgt.com/blog/835/spreadsheets-outgrown/ Depreciation is apportioning the cost of a fixed asset over a period of time instead of deducting the total cost as an expense upon purchase.  Five factors are required in order to produce an accurate depreciation figure: 1. Date placed in service - If a new asset is placed in service ... http://www.realassetmgt.com/blog/831/5-factors-required-accurate-depreciation/ IT assset management is the process of tracking and managing your district's IT assets by school, department, etc.  Verifying the existence and location of these assets can be difficult and time consuming.  As a result, physical audits are often thought of as tedious tasks that some school districts choose to ... http://www.realassetmgt.com/blog/829/school-districts-confident-asset-management/ The Governmental Accounting Standards Board (GASB) institutes and monitors standards to improve governmental accounting and financial reporting within state and local entities (school districts included), resulting in more useful data to better guide public issuers, auditors and users of financial reports. GASB 34 requires that fixed asset records be maintained by ... http://www.realassetmgt.com/blog/826/rolling-dice-gasb-compliance/ As we prepare to visit the NYSASBO Annual Expo, we want to remind schools that precise fixed asset data is essential to most school districts, particularly from a business perspective.  Reliable fixed asset records enable business officials to protect the district's investments.  From providing values for insurance coverage to reporting requirements ... http://www.realassetmgt.com/blog/824/fixed-asset-accounting-school-districts/ A business activity monitoring (BAM) tool can provide real time information for a business’ assets, processes and operations.  This is extremely helpful for making well informed decisions.   Having software for BAM is much like having a dedicated employee watching over all assets, capital projects, leases and maintenance plans 24/7.   Some of the ... http://www.realassetmgt.com/blog/822/business-activity-monitoring-tool-helpful/ Last week we looked at an ROI example for costs for accountants who manually track assets and run audits.  Today, see how an asset tracking system can you save time and money. Proposed new example: ABC Company's new fixed asset and inventory tracking software provides a built-in link to its e-Procurement system, eliminating data entry ... http://www.realassetmgt.com/blog/814/fixed-asset-management-system-saves-money-time/ To demonstrate the cost benefit of a specialist fixed asset management system, consider the following ROI calculation. Example ROI Calculation for ABC Company: Facts: 2,500 Assets GBV = $2,500,000 (average asset cost = $1,000) NBV = $1,250,000 Calculation of Benefits: Current Scenario Accountant I spends 25 hours per month manually entering data into an Access® database, generating basic ... http://www.realassetmgt.com/blog/808/cost-benefit-fixed-asset-management-system/ Inaccurate depreciation calculations It is a proven fact that nearly all spreadsheets contain errors, which is to be expected with information entered by hand. Whether it be the background asset data or the formula itself, there's little doubt that depreciation calculations, when based on a spreadsheet, are likely to be inaccurate. ... http://www.realassetmgt.com/blog/804/asset-depreciation-calculations/ Organizations large and small currently using spreadsheets to manage their fixed assets are missing out on benefits. An organization’s fixed asset register housed solely in Excel™ is prone to error and cannot provide the same benefits as a true fixed asset management system. Some of the main benefits of a specialist ... http://www.realassetmgt.com/blog/797/benefits-specialist-fixed-asset-system/ As the economic recession turns slightly upward, executive management teams and the boards of many private and public entities are exploring ways to proactively strengthen their financial positions in order to ride out the economic downturn. Among the strategies many of these organizations are taking is a move to more ... http://www.realassetmgt.com/blog/788/fixed-asset-management-advantages/ Retailers also have a chance to improve value by adopting a more robust attitude to asset tracking. One large corporation was recently able to add significant value by linking in store asset value to the time left on store leaseholds. By apportioning new store assets across the remaining life of ... http://www.realassetmgt.com/blog/783/783/ Acquiring organizations also need to understand asset health. Information on asset maintenance history and remaining asset lives is key to determining the required ongoing investment. While cash rich companies are now looking to maximize the current economic situation, few will be keen to make a major investment to overhaul an ... http://www.realassetmgt.com/blog/755/asset-loss/ The problem is that while most companies have good systems in place for recording initial investments, they pay lip service at best to managing later asset disposal. Far too many organizations are still reliant upon spreadsheets for recording fixed assets and create confusion by failing to record the movement of ... http://www.realassetmgt.com/blog/748/properly-recording-assets/ The acquisition of Cadbury by Kraft appears to signal another upswing in merger and acquisition activity that has been at a virtual standstill for the past couple of years. Certainly corporate and private deal makers are predicting that mergers and acquisitions will increase during the first half of 2010. This ... http://www.realassetmgt.com/blog/741/mergers-acquisitions-increase/ Merger and acquisition activity may be on the up but for many organizations now looking for a buyer, maximizing value is a major challenge. And while cash rich companies are keen to expand where possible, no organization wants to acquire a business that is likely to need unexpected investment ... http://www.realassetmgt.com/blog/737/maximizing-asset-mergers-acquisitions/ Total control over your fixed asset management data simply cannot be achieved through the use of a spreadsheet. Whether a user input error or unintentional miscalculation, inaccuracies within your fixed asset register are inevitable. With that said, how can you be 100% confident in the integrity of this vital data? ... http://www.realassetmgt.com/blog/732/732/ Fixed asset management is critical to the fiscal health of all operations. Frequent and effective fixed asset management processes could potentially save your organization hundreds of thousands of dollars a year. Why risk this by using spreadsheets? Here we'll look at two more aspects of fixed asset ... http://www.realassetmgt.com/blog/726/historical-reporting-multicurrency-relation-fixed-assets/ Spreadsheets also fail to address audit trails and parent/child assets as well as asset splits and batch disposals in relation to fixed assets. Lack of an audit trail and overall security A specialist fixed asset management system will track and record every detail of every action made by any user, which is ... http://www.realassetmgt.com/blog/716/audit-trail-parentchild-assets/ Establishing the highest standards of depreciation accuracy and best practices in fixed asset management will pay off in savings. There are many reasons why spreadsheets are not the solution for all business needs. With so many potential causes of and opportunities for errors, companies must look to software solutions that ... http://www.realassetmgt.com/blog/712/depreciation-accuracy/ From a purely operational standpoint, having an accurate asset register that records location, condition and the responsible contact can help ensure that assets are available and usable when needed. But how an organization manages its assets also has multiple effects on the entity’s finances, through the very tangible costs of ... http://www.realassetmgt.com/blog/708/sins-spreadsheets-controlling-fixed-assets/ Fixed asset management in relation to internal control is critical to the fiscal health of all operations. Frequent and effective fixed asset management processes could potentially save your organization hundreds of thousands of dollars a year. The PCAOB, and independent auditors, have already started the process of reviewing internal controls on ... http://www.realassetmgt.com/blog/704/summary-practices-controlling-fixed-assets/ To ensure accurate internal control, a detailed assessment of an organization’s current policies and procedures should be made, including review of current software adequacy. Sample reconciliation should be reviewed to determine the nature of the problem. Just how accurate or inaccurate is the present fixed asset management system? A sample ... http://www.realassetmgt.com/blog/698/initial-steps/ The Insurance Manager is often the forgotten player in the area of property records and fixed asset management. Yet in many companies insurance premiums are substantial. Insurance premiums are a direct reflection of the information supplied by the insurance manager to the broker or insurance company. Errors in the system, ... http://www.realassetmgt.com/blog/667/roles-responsibilities-fixed-asset-management-part-ii/ Fixed asset management is often a group effort in an organization, as many different positions share responsibilities. From the CFO to the Internal Auditor, each position plays a role in maintaining and reporting on the asset register and assuring the record system is accurate. The CFO and Controller have primary ... http://www.realassetmgt.com/blog/629/roles-responsibilities-fixed-asset-management/ Assign responsibility for maintaining both the assets and the system. In many organizations, responsibility for assets and internal control over those assets is dispersed. Specific responsibilities, with adequate controls, should be a priority in every company. Procedure to track changes and retirements. Perhaps the main reason that fixed asset ... http://www.realassetmgt.com/blog/616/lifecycle-practices-controlling-fixed-assets/ A comprehensive system of internal control of fixed assets encompasses a number of steps. Here are the critical stages: Capital expenditure approval controls are assumed to be in place. In most organizations, amounts above a structured threshold must be approved at senior management or executive level officials in an organization. Set ... http://www.realassetmgt.com/blog/613/lifecycle-practices/ Typically, when performing an initial inventory it is common to find that up to 15% of assets on the books may not be there. These assets are sometimes referred to as ghost assets. Additionally, it is possible to offset discrepancies, assets present but not on the books. These assets are ... http://www.realassetmgt.com/blog/606/stringent-control-fixed-assets/ Fixed Assets are sometimes referred to as Property, Plant and Equipment (PP&E) and the terms are used interchangeably. There are three crucial aspects of internal control in relation to fixed assets that top-level management should focus on. The next few blog posts will discuss the three key elements to accurate ... http://www.realassetmgt.com/blog/599/practices-controlling-fixed-assets/ The PCAOB, and independent auditors, have already started the process of reviewing Internal Controls on Fixed Assets. The best property record system in the world does not represent true Internal Control. The only way to assure that the property record is correct, and that the record truly reflects actual conditions, ... http://www.realassetmgt.com/blog/588/fixed-asset-management-internal-control/ The only way of assuring that the property record system is correct and accurate is to reconcile the records with the actual fixed assets physically present. In short, one has to take and reconcile a fixed asset inventory, just as is done annually with finished goods inventory. Using spreadsheets and antiquated ... http://www.realassetmgt.com/blog/582/physical-reconciliation-ppe-records/ There is one unique aspect of property accounting that may be the cause of inattention to verifying or validating the records. The very nature of depreciation expense, calculated periodically for financial statements, is that sooner or later the net book value of every asset will be written down to salvage ... http://www.realassetmgt.com/blog/575/ppe-records-tested-physical-inventory/ Independent audit firms have driven the SOX implementation in most organizations. For many companies, compliance with SOX began with their auditors or consultants initially suggesting what had to be done. Outside consultants were probably brought in to help establish and test the controls. Then the company's independent auditors tested the ... http://www.realassetmgt.com/blog/569/physical-reconciliation-company-property-records/ With inventory (raw material, work in process and finished goods), for the past 70 years companies have been required to perform a physical count and valuation at least once a year. Further, auditors are required to monitor closely the inventory taking and pricing. In the case of perpetual inventory systems, ... http://www.realassetmgt.com/blog/511/missing-element-ppe-controls/ are sometimes referred to as Property, Plant and Equipment (PP&E) and the terms are used interchangeably. In many companies the following elements of Internal Control over PP&E are considered and performed according to standard guidelines: Fixed Assets -Approval process for Capital Expenditures (Capex) -Determination whether planned expenditure is capitalized or expensed -Purchasing ... http://www.realassetmgt.com/blog/508/critical-element-internal-control/ Following the financial disasters at Enron, WorldCom and many others, Congress mandated in the Sarbanes-Oxley Act (SOX) that all publicly traded companies have a system of Internal Controls. Further, companies must evaluate them at least once a year and a report must then be provided to shareholders. An additional requirement ... http://www.realassetmgt.com/blog/505/internal-control-fixed-assets-2/ IFRS remains a hot topic within the finance community and news outlets. Here are just a few stories that have recently gone to press: Why Small Biz Isn’t Ready For IFRS IFRS conversion is a large task and some small companies may not be able to adjust. IFRS Returns to the Front Burner Are ... http://www.realassetmgt.com/blog/499/news/ 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.  Although spreadsheets have become one of the most widely used software applications ... http://www.realassetmgt.com/blog/494/asset-spreadsheet/ In times of economic uncertainty, a degree of caution and operational control are essential. Businesses that take care of the pennies on the asset register will soon start to see the dollars appearing on the balance sheet.   With a good asset register in place, organizations can employ excellent control over the ... http://www.realassetmgt.com/blog/485/dollars-balance-sheet-accurate-asset-register/ What happened to the fixed assets that were replaced by the shiny, new equipment? Are they being used across the business – or simply left unused in a cupboard or warehouse? With no budget forthcoming for new purchases, now is the time to get an accurate handle on corporate assets ... http://www.realassetmgt.com/blog/480/control-asset-register-maximize-asset-base/ Many organizations have made the transition to IFRS, with its associated implications for asset valuation, but have yet to fully recognize the administrative overhead and inaccuracy created by reliance upon spreadsheets. The adoption of a fixed asset register will not only streamline year-end audits and reduce reliance on specific, skilled personnel ... http://www.realassetmgt.com/blog/469/reduce-capital-expenditure-investing-fixed-asset-management/ A recent article on CFO.com, IFRS Returns to the Front Burner, shows once again the difference of opinions among finance officials on the true impact that IFRS conversion will have on organizations. CFO.com quotes C. Bradford Richmond of Darden Restaurants as writing:  "[T]he large majority of U.S. public companies, like Darden, ... http://www.realassetmgt.com/blog/463/ifrs-returns/ Legacy System:  Is it high risk? Capability, customization, and technical support are limited. Slow and clumsy to operate/process information. Poor reporting facility/difficult to extract accurate data. Auditors insist that a more reliable system is required. Unable to run on company specific platforms or servers. Integration with other e-business solutions is required. Vendor is no longer in business ... http://www.realassetmgt.com/blog/455/fixed-asset-register-key-business/ But where does your organization begin the search for a dedicated fixed asset management and tracking solution? There are multiple stages involved in researching and implementing a fixed asset management system. Before an organization begins to research a fixed asset management solution, it should identify current practices. What type of system do ... http://www.realassetmgt.com/blog/439/searching-dedicated-fixed-asset-register/ In the previous posts we have reviewed four reasons why having an accurate asset register that shows location, condition and the responsible contact can help ensure that assets are available and usable when needed. Other areas where organizations require a dedicated asset register also include: access to multi-currency, multi-lingual or ... http://www.realassetmgt.com/blog/430/100-confident-specialist-fixed-asset-management-system/ Now let's visit two more examples relating to the importance of a dedicated fixed asset register. Lack of an audit trail and overall security A specialist fixed asset management system will track and record every detail of every action ever made by any user, which is unattainable with spreadsheets. Dates, times and ... http://www.realassetmgt.com/blog/424/lack-audit-trail-parentchild-assets/ Let's take a look at just two of the many issues in which businesses, without a comprehensive fixed asset management system, are failing to address. Corporate governance requirements (SOX, CSOX, US Tax, GAAP, SAS 70, IFRS, etc.) Today, companies of all sizes are subject to increased scrutiny by government agencies and regulatory boards ... http://www.realassetmgt.com/blog/415/inaccurate-depreciation-lack-audit-trail/ There are many reasons to use spreadsheets, but organizations that use spreadsheets to manage an ever-growing asset register constantly struggle to address a variety of issues surrounding the accountability and traceability of their asset base. From a purely operational standpoint, having an accurate asset register that shows location, condition and the ... http://www.realassetmgt.com/blog/411/outgrown-spreadsheets/ Unfortunately for most companies accuracy - or lack of it - on the asset register is a low priority. Finance teams regard the issue as self-resolving: the majority of the assets are no longer actually in use and have already been depreciated down to zero, so there is no impact ... http://www.realassetmgt.com/blog/405/accuracy-asset-register/ The problems caused by poor asset information extend beyond the initial insurance premium. What happens if a company has to make a claim? As soon as a good insurance assessor sees a ten-year old PC on the asset register, alarm bells start to ring. With minimal likelihood of such an ... http://www.realassetmgt.com/blog/387/problems-caused-poor-asset-information/ Despite admitting poor processes and a reliance on personal knowledge to determine asset location, most organizations' awareness of the quality and accuracy of asset information is woefully inadequate. The majority believe that the asset register to be, at worst, 5% inaccurate. They are shocked when a physical audit reveals just ... http://www.realassetmgt.com/blog/377/poor-asset-management-financial-penalty/ Insurance is a standard business overhead; it increases annually and organizations work hard to negotiate better deals where possible. The cost of insurance is, of course, based on the assets held. For asset-heavy organizations in areas such as manufacturing and distribution, insurance is a significant annual overhead. Yet most companies openly ... http://www.realassetmgt.com/blog/362/insurance-overhead-relation-fixed-assets/ Accurate asset management could help organization's reduce insurance premiums. US companies are increasingly aware of the escalating insurance premiums, but, in reality, the majority of organizations are actually over insured. The savings potential of accurate fixed asset management is often overlooked and many companies are insuring assets they no longer own. With ... http://www.realassetmgt.com/blog/359/counting-cost-fixed-asset-management/ The PCAOB, and independent auditors, have already started the process of reviewing Internal Controls on fixed assets. The best property record system in the world does not represent true Internal Control. The only way to assure that the property record is correct, and that the record truly reflects actual conditions, ... http://www.realassetmgt.com/blog/352/internal-control-fixed-assets/ It is equally necessary that the same kind of reconciliation of reported balances to actual fixed assets is in place because for many companies, physical assets may represent 35% or more of total assets. Without a periodic reconciliation, the property record system will lose accuracy as items are scrapped or ... http://www.realassetmgt.com/blog/338/spreadsheets-antiquated-systems-accurate-fixed-asset-tracking/ In many companies the following elements of Internal Control over fixed assets are considered and performed according to standard guidelines: Approval process for Capital Expenditures Determination whether planned expenditure is capitalized or expensed Purchasing and Accounts Payable systems are correctly applied If capitalized, appropriate useful life and salvage value determined Correct depreciation expense is calculated ... http://www.realassetmgt.com/blog/325/elements-internal-control-fixed-assets/ A recent article on CFO.com titled “Since Sarbox, Non-audit Fees Dove from 51% to 21%,” states: “Remember the Sarbanes-Oxley Act? In the furor over the current financial meltdown and its attendant cries for stiffer regulations, good old Sarbox has largely faded from the news. But according to a new study, one ... http://www.realassetmgt.com/blog/321/sarbanes-oxley-fixed-assets/ There are simple processes that can be followed to ensure greater information consistency. Recording serial number and asset location as well as value meets not only the needs of the finance team but also provides the detailed information required to track assets and status for local departments. Critically, by creating a ... http://www.realassetmgt.com/blog/314/greater-information-consistency-asset-locations/ While IT is typically good at maintaining its own inventory register to determine system maintenance and support, such information rarely finds its way to the finance team. Indeed, even if IT does provide information on individual asset disposal, having consolidated these assets, finance has no way of recording the information ... http://www.realassetmgt.com/blog/309/information-asset-register/ For most companies, the answer is hard to give. One of the major issues is the complete lack of coordination between the fixed asset register recorded within finance and the inventory lists used across the rest of the organization – from fleet managers to IT and plant maintenance. Within finance, the ... http://www.realassetmgt.com/blog/298/inconsistent-information/ Fixed asset management is a fundamental business process. It determines corporate value and has a direct impact on profitability. Yet how many US organizations are truly confident in the value of corporate assets? While most have good systems in place for recording initial investments, they pay lip service at best ... http://www.realassetmgt.com/blog/287/fixed-asset/ Risking Business Value Growing risk awareness and an increasingly dangerous business environment may have prompted an increasing number of companies to invest in disaster recovery (DR) as part of the business continuity program – but how safe is that investment? Just what, indeed, is being recovered? Few organizations have real insight into ... http://www.realassetmgt.com/blog/274/poor-asset-management-undermine-business-integrity/ Unilever is also leveraging the additional memory on the Active tags to create a complete history of each asset, from initial purchase order number, through location, unique serial number and its child/parent relationship to other machinery and full maintenance history. This latter point is particularly important for the management of complex ... http://www.realassetmgt.com/blog/255/rfid-real-time-view/ But can RFID asset tracking actually deliver on this promise? Are the tags reliable and robust in production environments and just what is the possible maximum range between tag and RFID reader? The first decision organizations need to make is whether to opt for Active or Passive RFID tags. Passive tags ... http://www.realassetmgt.com/blog/241/rfid-practice/ There is now a greater understanding across organizations of the value of accurate asset registers – and the potential business cost of today’s endemic inaccuracy. With upwards of 50% of assets on most registers no longer in use, organizations recognize they are in danger of over-paying insurance premiums, creating mismatched ... http://www.realassetmgt.com/blog/237/fixed-asset-challenge/ RFID, or Radio Frequency Identification technology, is generally used for tracking inventory. But in a recent article appearing in the Wall Street Journal, New Ways to Use RFID , it seems consumers are going beyond the initial intentions of RFID and finding new and creative ways to use the technology. The ... http://www.realassetmgt.com/blog/230/ways-rfid/ San Francisco Location is 3rd in U.S. for Financial Software Developer Real Asset Management International (RAMI) has announced that on May 25 it will open an office in San Francisco to support current customers and future business development. This will be the first office on the West Coast and the third ... http://www.realassetmgt.com/blog/226/real-asset-management-opens-west-coast-office/ 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 ... http://www.realassetmgt.com/blog/222/asset/ With a good asset register in place, organizations can not only impose excellent control over the management of assets but also streamline processes to reduce the administrative overhead – hence saving costs. Rather than relying on complex spreadsheets – and associated expertise – to manage new depreciation calculations, ... http://www.realassetmgt.com/blog/218/asset-registers-impose-excellent-control-management-assets/ Spreadsheet Quandary The problem for most organizations is that despite going through the process of moving to IFRS and adapting to the new requirements for asset accounting and revaluations, the majority of organizations are still reliant upon spreadsheets to manage the asset register. The process is cumbersome, prone to ... http://www.realassetmgt.com/blog/212/spreadsheets-effectively-manage-fixed-asset-register/ A recent article on CFO.com, US Will Be The Outlier Without IFRS, cites an international accounting rule maker stating that the United States will pay a high price if not able to embrace International Financial Reporting Standards within the next five years. Many organizations are currently still debating the merits ... http://www.realassetmgt.com/blog/206/managing-fixed-assets-relation-ifrs/ Fortunately, businesses are increasingly implementing dedicated fixed asset management systems that are automatically updated to help them keep up with the latest depreciation treatments. These systems also provide enhanced location tracking, compliance reporting and other features that streamline many asset life processes. As a part of a broader fiscal strategy, the ... http://www.realassetmgt.com/blog/199/dedicated-fixed-asset-management-systems-integral-to-financial-management/ The stimulus act also extends temporary provisions enacted in 2008, allowing business expense deductions of up to $250,000. Highlights of the Business Tax Cuts: * 50% Bonus Depreciation * No cap on total amount of assets * Applies to all capital assets with IRS life of 20 years or less * ... http://www.realassetmgt.com/blog/198/the-2009-stimulus-act-and-tax-cuts/ A recent CFO.com article, Bonus Depreciation Boosts Cash Flows, cites a study conducted by the RiskMetrics Group which shows how some companies are benefiting financially by taking advantage of the American Recovery and Reinvestment Act of 2009 in relation to fixed assets. The aim of the 2009 Stimulus ... http://www.realassetmgt.com/blog/197/organizations-benefit-from-2009-stimulus-act/ Fixed assets are often one of the largest items on a company’s financials, yet they are poorly managed, which can potentially cost hundreds of thousands of dollars annually. With the current recession and the changes to depreciation rules in the 2009 Stimulus Act, it has never been more ... http://www.realassetmgt.com/blog/196/conclusion-fixed-asset-management-and-roi/ Example ROI Calculation for ABC Company: Facts: 2,500 Assets GBV = $2,500,000 (average asset cost = $1,000) NBV = $1,250,000 Calculation of Benefits: Current Scenario Accountant I spends 25 hours per month manually entering data into an Access® database, generating basic reports, and processing transfers and disposals on a monthly basis. Based on a total, yearly ... http://www.realassetmgt.com/blog/195/fixed-asset-roi-calculation-example/ It is a proven fact that nearly all spreadsheets contain errors, which is to be expected with information entered by hand. Whether it be the background asset data or the formula itself, there's little doubt that depreciation calculations, when based on a spreadsheet, are likely to be inaccurate. ... http://www.realassetmgt.com/blog/194/inaccurate-depreciation-calculations/