Fixed asset management practices vary across the spectrum, from basic tracking of fixed asset items to the adoption of an asset life cycle methodology. Best practices are detailed in the ISO 55000 guide, Asset Management, which details standards gaining acceptance in the public and private sectors.
Basic fixed asset tracking requires that the following information be recorded for all fixed assets costing more than an organization’s approved capitalization level (i.e., minimum purchase threshold):
The sum of this basic information in the fixed asset record should support the general ledger balance for each asset category or account. Once this information is established and deemed reliable, organizations can turn to methodologies geared more specifically to strategies in asset construction, acquisition, or replacement.
ISO 55000 provides guidance and a multistep requirements checklist of best practices in physical asset management. Typically, this information is relevant to government, gas, electricity, and water utilities; road, air, and rail transport systems; public facilities; and process, manufacturing, and natural resource industries
ISO 55000 requires that IT systems used to manage asset data allow for the sharing and retention of information across the organization and throughout an asset’s life cycle. Specifically, IT systems should store data pertaining to asset:
In order to facilitate compliance with ISO 55000, fixed asset tracking systems and software should be capable of providing an accurate and consistent view of all asset information. Having the appropriate systems in place allows organizations to easily incorporate asset management as a part of strategy implementation. Advanced compliance with ISO 55000 recommends that asset management software has the capacity to provide portals or other methods for outside parties (e.g., engineering firms, maintenance contractors) to access the system so that everyone touching that asset data is interacting with a single database in real time.
Another best practice defined by ISO 55000 assessment methodology is completion of a graphical evaluation of a utility’s strengths and weaknesses in regard to asset management. The components used in this assessment include evaluative questions regarding a utility’s:
Accurate fixed asset information is necessary for utilities to maximize asset value and usage, and to ensure that budgets for fixed assets are spent efficiently and effectively, aligning with organizational strategy. It is worth the investment in time and technology.
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