The International Accounting Standards section 16 (IAS 16) within IFRS outlines the requirements and concepts related to the accounting of fixed assets. Componentization requires each part of a fixed asset with a cost that is significant in relation to the total cost of the item to be depreciated separately. It’s very similar to a cost segregation study performed for tax purposes, where different bits of a building are separated into different ‘tax lives’ to take advantage of accelerated depreciation.
How to set up an asset register that is IFRS compliant
IFRS requires companies to break assets down into new assets to match its’ standard. Outputs such as journals and reports must reflect the newly ‘split’ asset register. Once you get your head around it… it’s simple!
To set-up an asset register to be IFRS compliant first create a new book called ‘IFRS’. Once you have a book ready, you can set up the depreciation rules in line with IFRS by using the following tips:
Planning for a new asset management process
If your organization is considering implementing a new fixed asset management process, congratulations! A proper fixed asset management system can save your organization time, money and headaches. Now that you have decided to simplify your asset management, it’s time to plan out the conversion to your new system.
How to use BI visualization to make informed decisions
Business Intelligence (BI) software can assist your team by providing your data in a visualized format from the big picture down to the small details that you need for business analysis.
Increased access to BI information will help you to make decisions that drive better business performance. The more you know about your business details, the more informed your decisions become. It can be done with real-time management thereby not only improving your access to knowledge but also increasing your efficiency. There is no delay caused by waiting for reports or other information. If you have a mobile workforce, we suggest loading your BI tool onto your remote devices such as phones and tablets, allowing your users to access information anytime and anywhere.
Completing physical audits faster with RFID
One of the easiest ways to cut down on the time it takes to complete a physical audit is to remove the need for ‘line of sight’ for scanning. With barcoded assets, the scanner needs to have a ‘line of sight’ to the barcode in order to scan and include the fixed asset in the audit. However, with the use of RFID passive tags, you can eliminate the need to visually locate barcodes, which are often on the underside of desks, back corners of machinery, and other hard to reach positions.
Your CMMS & Document Management, reduce paper & save money
One way your maintenance/facilities departments can make significant cost savings is to eliminate all paper forms. You can do this through an integrated document management functionality in your CMMS. The ability to save all your documents and processes in your CMMS will help your team to be more organized, save time and reduce your carbon footprint.
Organizing planned & reactive maintenance
One of the ways your organization can increase st
aff efficiency and reduce your departmental costs is to have an accurate process for dealing with planned and reactive maintenance of your fixed assets.
A quick look at the ‘parent/child’ fixed assets relationship
Fixed assets can often be part of a ‘parent/child’ relationship. This is a relationship where one or many fixed assets are dependent on another asset. The dependent assets are set up as a ‘child’ and the asset it depends on is the ‘parent’. For example with a computer and a software license installed on it, the computer is the ‘parent’ and the license assumes the role of ‘child.’
Events to include on your asset register
A fixed asset register should provide five types of asset events. These 5 events are designed to cope with any changes that may occur during an asset’s life time. The five events include:
Is a general ledger robust enough for your fixed assets?
Many organizations use general ledgers as their accounting systems. And while this system is sufficient for some businesses, it is not always the most suitable solution. If your organization is currently using a general ledger system for its fixed asset management the following may be signs that it is not robust enough:
