fixed assets

• Fixed Assets

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Fund accounting - Fixed assets and long-term debts

1 Fixed assets and long-term liabilities assigned to a specific enterprise fund

are referred to as fund fixed assets and fund long-term liabilities.Hay, p


Gross fixed capital formation - Second-hand fixed assets

1 Often it is bought from Europe, North America and Japan, where fixed

assets are on average scrapped more quickly.



1 Fixed assets disposed of may be sold for continued use by another producer,

abandoned by the owner, sold as scrap, or recycled in part or as a whole. But occasionally

a complete industrial plant is purchased, dismantled and reassembled somewhere else.

Because GFCF conceptually includes many transactions in used fixed assets by resident

firms, which are valued lower than new assets, this creates problems for the estimation and

valuation of the gross capital stock.



1 It may appear as though the total fixed capital stock has grown, even although the “net addition to fixed assets” refers only to the change in

ownership of an already existing asset.



1 But given a growing domestic and international trade in second-hand

equipment, GFCF may understate the true level of gross fixed investment

activity and overstate the real additions to the capital stock, insofar

as fixed assets produced at a previous time and resold later are

also invested in, without this showing up in the accounts.


Fixed assets

1 'Fixed assets', also known as tangible assets Dyckman, Intermediate Accounting,

Revised Ed. (Homewood IL: Irwin, Inc. 1992),195. or 'property, plant, and equipment' (PPE), is a term used in

accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such

as cash or bank accounts, which are described as liquid assets. In most cases,

only tangible assets are referred to as fixed. https://store.theartofservice.com/the-fixed-assets-toolkit.html

Fixed assets

1 'IAS 16' (International Financial Reporting Standards#List of IFRS

statements with full text link|International Accounting Standard)

defines Fixed Assets as assets whose future economic benefit is probable to flow into the entity, whose cost

can be measured reliably.


Fixed assets

1 These are items of value that the organization has bought and will use for an extended period of time; fixed assets normally include items such as Estate in land|land and buildings, motor vehicles, furniture, office equipment, computers,

fixtures and fittings, and plant and machinery. These often receive favorable tax treatment (depreciation|depreciation

allowance) over short-term assets.


Fixed assets

1 From the foregoing, it is apparent that in order to report a true and fair position of the financial jurisprudence

of an entity it is relatable to record and report the value of fixed assets

at its net book value


Revaluation of fixed assets

1 In finance, a 'revaluation of fixed assets' is a technique that may be required to accurately describe the

true value of the capital goods a business owns. This should be

distinguished from planned depreciation, where the recorded

decline in value of an asset is tied to its age.



1 'Fixed assets' are held by an enterprise for the purpose of producing goods or rendering

services, as opposed to being held for resale in the normal course of business. For example, machines,

buildings, patents or licenses can be fixed assets of a business.



1 The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be

helpful in order to decide whether to invest in another business. If a

company wants to sell one of its assets, it is revalued in preparation

for sales negotiations.


Revaluation of fixed assets - Reasons for revaluation

1 It is common to see companies revaluing their fixed assets. It is

important to make the distinctions between a 'private' revaluation to a 'public' revaluation which is carried

out in the financial reports. The purposes are varied:



1 * To conserve adequate funds in the business for replacement of fixed

assets at the end of their useful lives. Provision for depreciation based on historic cost will show inflated Profit

(accounting)|profits and lead to payment of excessive dividends.



1 * When the company intends to take a loan from banks/financial

institutions by mortgaging its fixed assets. Proper revaluation of assets would enable the company to get a

higher amount of loan.


Revaluation of fixed assets - Appraisal method

1 Under this method, technical experts are called in to carry out a detailed examination

of the assets with a view to determining their fair market value. Proper appraisal is necessary when the company is taking out

an insurance policy for protection of its fixed assets. It ensures that the fixed assets are neither over-insured nor under-insured.

The factors which are considered in determining the value of an asset, are as

follows:https://store.theartofservice.com/the-fixed-assets-toolkit.html

Revaluation of fixed assets - Selective revaluation

1 Such revaluation will lead to unrepresentative amounts being

shown in the Fixed Assets Register (FAR)


Revaluation of fixed assets - Selective revaluation

1 It is not consistent to value and depreciate fixed assets using

different bases. Therefore, selective revaluation is generally not considered best practice.


Revaluation of fixed assets - Preliminary considerations

1 * What is the most suitable method, taking into account the type of fixed

assets, statutory requirements, availability of required information? Should the values arrived at by one method be crosschecked with the

values derived from another method?


Revaluation of fixed assets - Upward revaluation

1 The FASB in the U.S. does not allow upward revaluation of fixed assets to reflect fair market values although it

is compulsory to account for impairment costs in fixed assets (downward revaluation of fixed

assets) as per FASB Statement No. 144, Accounting for the Impairment

or Disposal of Long-Lived Assets.



1 In other countries, upward revaluation is mainly done for fixed assets such as land, and real estate whose value keeps rising

from year to year. It seems the concept of upward revaluation of fixed assets such as

real estate has not been widely welcomed by a majority of companies in USA on account

of fear of paying higher property and capital gains taxes. Further, the provision against upward restatement ensures conservative

valuation.



1 Similarly, law prohibits payment of dividend out of any reserve created as a result of upward revaluation of

fixed assets


Revaluation of fixed assets - Important points

1 * The increase in value of fixed assets because of revaluation of

fixed assets is credited to ‘Revaluation Reserve (accounting)|Reserve’, and is not available for

distribution as dividend. Revaluation Reserve is treated as a Capital

Reserve.


Revaluation of fixed assets - Important points

1 * The increase in depreciation arising out of revaluation of fixed assets is debited to revaluation reserve and

the normal depreciation to Profit and Loss account.


Fixed assets management

1 'Fixed assets management' is an accounting process that seeks to

track fixed assets for the purposes of financial accounting, preventive

maintenance, and theft deterrence.



1 Organizations face a significant challenge to track the location,

quantity, condition, maintenance and depreciation status of their fixed assets. A popular approach to

tracking fixed assets uses serial numbered Asset Tags, which are

labels often with bar codes for easy and accurate reading. Periodically,

the owner of the assets can take inventory with a mobile bar code scanner|bar code reader and then

produce a report.



1 Off-the-shelf software packages for fixed asset management are

marketed to businesses small and large. Some Enterprise Resource

Planning systems are available with fixed assets modules.


Fixed assets management - Fixed Asset Tracking Software

1 Tracking assets is an important concern of every company, regardless of size. Fixed

assets are defined as any 'permanent' object that a business uses internally including but not limited to computers, tools, software, or

office equipment. While employees may use a specific tool or tools, the asset ultimately

belongs to the company and must be returned. And therefore without an accurate method of keeping track of these assets it would be very easy for a company to lose control of them.


Fixed assets register

1 Fixed assets are those such as land, machines, office equipment,

buildings, patents, trademarks, copyrights, etc. held for the purpose of production of goods or rendering of services and are not held for the

purpose of sale in the ordinary course of business.



1 Fixed assets constitute a major chunk of the total assets in the case of all manufacturing entities. Even in the

case of service entities such as hotels, banks, financial institutions, insurers, mobile / telephone service

providers etc. it has become imperative to invest heavily in

furnishing, equipment, and technology to attract, and retain

customers. https://store.theartofservice.com/the-fixed-assets-toolkit.html


1 Just as it is important for a person investing on the NASDAQ to know

those investments, so it is important for a business entity to have a list of its fixed assets. A fixed asset register

is that list of assets.


Fixed assets register - Making entries in the FAR

1 Not all assets are Capital_expenditure|capitalized. Keeping in view the concept of materiality, a company may have a policy to capitalize only those assets

which cost more than a specified amount. In the US, government agencies are

required to expense all equipment whose value is below a threshold limit. Similarly,

fixed assets which have a useful life of less than one year are not capitalized.


Fixed assets register - The format of FAR entries

1 **i. If movable assets constitute a significant portion of total fixed

assets, details will be necessary on their movement from one

department / cost center / people to another.



1 *b) Customized reports on fixed assets

required by management.



1 *f) Location of fixed assets. If fixed assets are located at numerous

locations, greater details will have to be given. In the case of a

construction company, the assets are located at different work sites. These work sites maybe in different cities /

countries / continents.



1 *g) Maintenance costs. Some fixed assets require regular servicing to

keep them running in an efficient and satisfactory manner. It would be necessary to keep a tab on the

maintenance costs, dates of servicing etc. during a stated period.



1 The crucial point is related to selection of exchange rate for conversion of fixed assets



1 Similarly, for companies having their shares listed on American stock exchanges, the fixed assets are

required to be stated in accordance with the requirements of US

generally accepted accounting principles (US GAAP).


Fixed assets register - Identification of a fixed asset

1 In a large corporation, the task of identifying and locating a specific fixed asset can be difficult unless

numbering is scientific, systematic, and up-to-date. A common problem in most companies is the improper maintenance of the FAR. Physical

verification of fixed assets becomes a futile exercise unless the FAR is

properly maintained.https://store.theartofservice.com/the-fixed-assets-toolkit.html


1 It would be advisable to use a scientific numbering technique to

identify fixed assets. The process of numbering fixed assets is called tagging.The purpose of Tagging assets is Tracking movement of

assets from one place to another place. An identification number (combination of alphabets, and

numbers) is written on the asset. Engraving the identification number on the asset is advisable in the case of plant and machinery where there

is heavy wear and tear.



1 It is not necessary to tag all fixed assets. Land, buildings and vehicles

all have independent systems of tracking in registration papers and survey numbers.and indicating the

amount at whcich the asset was bought at is important this amount is

atimes called capital value.


Immigration to Macau - Criterion for investment in fixed assets

1 The criterion for investment in fixed assets was discontinued in 2007. It

had allowed for residency with purchase of real estate valued at 1

million MOP or more, and the deposit of 500,000 MOP into a Macau bank

account for seven years. The government announced in 2010 it had no intention to make the fixed

asset investment plan available again.


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fixed assets

Documents

accounting fixed assets

fund fixed assets

hand fixed assetsfixed

longterm debts fixed

shortterm assets

new assets

current assets

liquid assets