Fixed Assets Management (FAM)
An asset for a company is an entity that helps the company to generate revenue for a long time by using that asset. On the other hand, many economists have defined an asset as an entity whose value increases with time. It’s a matter of time that a company sells and purchases assets. Any asset that is fixed and cannot be sold for a particular financial accounting period is termed as a fixed asset.
Fixed Assets are those assets which have a useful life of more than 1 year and these assets are used in business and substantial cost is incurred in purchasing these assets, they are also called the non current assets/property, plant and equipment represent assets held for not less than 365 days or 12 months from the balance sheet date. These assets represent long-term assets held by the company which is expected to yield benefits for more than one year for example of Fixed assets:- Machinery, Land and Building, Vehicles, Furniture and Fixtures, Leasehold improvements etc. Fixed assets enable their owner/company to carry on its operations. In accounting, fixed does not necessarily mean immovable; any asset expected to last, or be in use for, more than one year is considered a fixed asset. On a balance sheet, these assets are shown at their book value (purchase price less depreciation).
Fixed assets can be divided on the basis of two factors:
On the basis of Depreciation, Fixed assets can be divided into two parts:
On the basis of Tangibility, Fixed assets can be divided into two parts:
Usually, companies with lots of fixed assets have fixed costs. More fixed than variable costs will make a good revenue year better but make a bad revenue year worse.
Fixed Assets Calculation and finding net fixed assets: We can calculate the Net fixed amount (Depreciated Fixed Asset Value) by taking original asset value and then deducting the amount of depreciation that has already been recorded against this fixed asset and this calculation is recorded at a Balance Sheet level on financial reports.
Formula: Cost of all Fixed Assets purchased + Any Installation cost + Leasehold improvement (if any) -Accumulated Depreciation = Net Fixed Asset
ERP2ALL’s Fixed Asset module consists all the facets of fixed asset management are covered in a comprehensive manner alongside detailed reporting is enabled against each functionality to help reflect the true picture, and users are never out of sync and always have the correct and updated picture of the company’s valuable assets. ERP2ALL’s Fixed Assets (FA) module enables users to handle asset registration, classification, tagging, retirement and disposal for the individual as well as composite assets. Management functions provide financial, tax and lease asset accounting capabilities in addition to repair/service scheduling. The system handles multiple depreciation methods and is fully integrated with the general ledger including asset control through flexible asset structures, retroactive processing, long-term projections, user-definable calendars and the ability to track insurance and replacement costs.