These long-term fixtures must be analyzed on a regular basis in order to decide their future market value for a company. Assetsystems.com (2010), states that, "One of the most common barriers in implementing an asset management system is the reconciliation of existing records to the results of the new system." Often, how assets have been inventoried or managed, is the first factor that must be considered by retrieving the most accurate information regarding each of the companies assets.
Finding the history of the managed asset will help determine the other factors that are essential to knowing if the asset should be replaced or fixed. The cost of the asset, the estimated lifespan of the asset, and the residual value of the asset also should be determined in order to influence the decision. The cost would include any amount that has been incurred to gain possession of the asset and any amount that would need to be spent in order for the asset to maintain is viability. In these costs, there could be delivery, acquisition, site installation, professional fees, and training that could need to take place. These factors would be considered and valued for replacing and asset against the same factors for fixing an asset. The final valuation would determine the most economical or profitable...
Gaining this holistic understanding of the companies properties and assets would give the company an understanding of its total valuation. "Asset allocations are important in their own right and provide a useful framework for analyzing many of the fundamental problems of optimization," states Richard O. Michaud (2008). A globalized picture of company assets would be useful to as a key factor in knowing which should be restored, which should be replaced, and which should be discarded.
Asset Systems Incorporated (2010). Reconciliation Services. Retrieved March 29, 2010, from, http://www.assetsystems.com/services_recon.asp.
McCrary, Stuart A (2010). Mastering Corporate Finance. Hoboken, NJ: John Wiley and Sons, Inc.
Michaud, Richard O (2008). Efficient Asset Management. New York, NY: Oxford University Press.
Netsuite (2010). Netsuite Announces New Financial Planning Module Enabling Business Performance Management for Strategy, Planning, and Execution. Retrieved March 29, 2010, from http://www.netsuite.com/portal/press/releases.
