WHAT ARE FIXED ASSETS?

Fixed Assets are regarded as the most crucial component of a company with which it is able to function and offer its variety of services and/or products. So, what are fixed assets?

Fixed Asset, as identified in the accounting standards, is every tangible and intangible item or piece of property that a company possesses for a long term use either by purchasing it or acquiring it in any other form may be, in order to be used in the production process or in supplying goods and services. It is obvious from the definition that fixed assets are not to be sold or dealt with to gain any profit but rather are used to accomplish the different production processes of the company and they are not likely to be converted quickly into cash.

For instance, the computer and the printer are a company’s fixed assets. Fixed assets can range from simple and tiny tools to large, complex and specialized equipment, this also includes the very land and building in which the company operates.

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The IAS (International Accounting Standards) has divided the fixed assets into 2 categories:

Intangible Fixed Assets and Tangible Fixed Assets

The main difference between the two is rather simple. The first (Intangible fixed assets) is every item that is not physical in nature. Such as the intellectual property ( patents, trademarks, copyrights, business methodologies), goodwill and brand recognition

that is estimated to be of millions of dollars of worth (Apple and Google for example.) those are considered to be of higher value to a company and could be sold or leased etc.

Tangible Assets on the other hand are those that have a physical form such as buildings and land, equipment, furniture, and machinery that are meant to be used in production and supplying goods and services.

It should be noted though, tracking assets by companies is to ensure that they are in the right place at a definite time to guarantee a smooth workflow. Not to mention that it does so to track the periodic maintenance schedules for each and every asset as well as the warranties and condition of the fixed assets themselves.

Want to know more about “Why to manage and track the fixed assets?”

Tragging Fixed Assets Software help companies

Track their fixed assets

Today, with the Fixed Assets Tracking Software and Management Solutions we propose, a manager will be able to trace the company’s fixed assets in a simple click. Our solution, based on RFID technology, will allow accomplishing this process promptly and at a very low-cost.

In order to achieve this, clients only need to attach simple and unique RFID Tags to their existing fixed assets. A compliant software and RFID scanner will then communicate with these tags to localize and track the fixed assets to which they are coupled.

Avoid lack of confidence in data integrity

Reduce and/or cease manipulation and cheating average by providing a high level of accuracy and security. A specialist system comes with strict security features to address issues of input errors and inaccuracies and automates the entire fixed asset management process consequently saving more time.

Fixed assets, also known as hard assets, are considered long-term assets on the balance sheet. This means that the company expects to profit from use of the asset for a long time often referred to as its useful life. However, fixed assets do have a finite useful life, and accountants must record the decline in usefulness (the assets’ value) by recording periodic depreciation. Over time, each asset’s value is reduced, but financial statements will continue to use the original cost of the asset rather than its current market value. To know how much value your assets are worth at any given time, you’ll need a tracking system.

Track and manage the maintenance schedule for the fixed assets

Maintenance expenses are routine periodic costs performed to protect the value of fixed assets. Unlike capital improvements, they do not increase value. You can record and maintain an up-to-date file on maintenance and service of your fixed assets to have complete maintenance records on a fixed asset easily accessible.

Each time a fixed asset is sent to service, you record all relevant information such as date of service, vendor number and service agent’s phone number.