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Develop and maintain a physical asset register

Develop strategies for managing physical assets

THHGGA08B

Session 1a

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Objectives Today

1. Introduce outline for unit

2. Establish timelines for assessments

3. Develop Knowledge of assets

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• At the end of this session you should be able to:– Identify and Explain non-current assets– Identify and develop an asset register– Develop strategies for managing physical

assets

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What are non-current assets• A non-current asset is an asset which is expected to be

held for a period exceeding 12 months. There are 3 types of non-current assets:

– Tangible Assets– Intangible Assets– Long Term Investments

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Tangible Assets

• Also called fixed assets, these are assets that can be seen and touched. Examples of fixed assets are:– Motor Vehicles– Plant & Equipment– Office Furniture & Equipment– Property

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Intangible Assets• Are assets that have no physical existence;

– Goodwill– Trademarks– Copyrights– Patents

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Long Term Investments– Investments for a period in excess of 12

months. Eg,• Shares in other companies• Bonds & debenture Stock• Preference Shares• Government Bonds

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What is an Asset Register

An asset register is a register / book where all the fixed costs are recorded. The asset register will contain the following information:

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Asset Register

• Date of purchase for asset• Description of asset• Serial Number• Asset number allocated by administration

(usually incorporates 3 letters that identifies the department and the last 4 digits of the serial number)

• Date of end of life expectancy

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Asset Register cont..

• Depreciation rate

• Total capital cost

• Annual depreciation amount

• Total depreciation expensed to date

• Written down value

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Aligning the General Ledger & The Asset register

• The general ledger and the asset register have to reconcile in the following:

– Total of fixed assets in the general ledger has to balance to the total of the asset register Capital cost column.

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Aligning the General Ledger & The Asset register

– Total of accumulated depreciation in the general ledger has to balance to the Depreciation expensed to date column in the asset register.

– Net written down value in the general ledger has to balance to the total of the net written down value column in the asset register.

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Develop Strategies for managing physical assets

• Strategies for managing physical assets must reflect the overall enterprise business and marketing objective.

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Equipment Data Card

• Type of Plant or Equipment

• Its location

• Its energy source

• Its age

• Its condition

• Its forecast lifespan

• Warranty period – date of expiry

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Equipment History Record

• Logs inspections

• Logs repair history

• If out of warranty– Do you repair– Or replace

• Logs maintenance requests

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RepairsRegular Maintenance

• Advantages– Keeps equipment operating efficiently– Reduces breakdowns– Reduces energy consumption– Increases life expectancy

• Disadvantages– Equipment has to be shut-down for maintenance– A maintenance department must be kept– Spare parts have to be in stock

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Exercise

• Students to develop an asset register for a hospitality / tourism venue

• Students to develop a plant / equipment card