Be it any business or multinational corporations, capital assets always form a major and significant portion of the total asset. Now since these capital assets are in several forms, companies and managements might not be aware at times regarding how to use it and that leads to some of the worst havoc. Most of the asset management companies are constantly up to provide them with the services, but still, there’s no importance provided to it. Identifying the benefits is more needed to avail the services of asset management.

While speaking with the experts from Capital Asset Exchange and Trading they have recommended several ways which according to them might help the companies in maintaining the capital assets. First and foremost, it is essential for the companies to have a capital asset policy which will determine and even define what is considered as a capital asset for that particular company. Developing appropriate thresholds is quintessential while making the capital asset policy. It depends completely on the size of the organization and the types of assets that they have purchased, the minimum dollar threshold could range from $3000 to $5000 and at times even more than this as well.

All the assets which are of immense use to any company and lives more than a year are categorized typically as capital assets for the company. Even, there are expenditures like repair, maintenance and constant betterment of it, so that the life of the equipment can be prolonged, and all of it must be capitalized as well. According to some of the expert comments, the policy must even hold guidelines on the useful lives of the asset type like that of buildings, equipment, and furniture along with the method of depreciation so that it can be applied in the due course of time. Having defined all these criteria makes it much easier for identifying the assets which are up for capitalization.

While this particular process has been dealt with, the experts move on to the next way in which the capital assets can be managed effectively. In order to maintain the accounting properly for additions and deletions, it is necessary to carry on accurate record keeping so that the capital assets remains duly noted down in the books. Before carrying out the actual purchase or disposal of the asset, it is expected to carry out a prior approval process since it always helps in ensuring that assets are validly added and removed from the maintenance books. The employee who must be engaged in giving the approval must not be the same employee who is involved in the actual purchase or disposal of the capital asset since it enhances the chances of the entire process being manipulated and prejudiced.

Since the entire stock of capital assets might have different items, experts from Capital Asset Exchange and Trading believe that it is necessary to review the entire capital asset listing at a regular interval. This helps in updating the information inaccurate figures and the list is without any errors. There is multiple software available which implemented can make the entire process easier and much more efficient.

About The Author

Lyle Hollar