It's often quite surprising just how much money can be tied up in assets, and it's usually the case that the larger the company or organisation, the more value they have invested in their assets.
Assets can cover a great variety of things, from personnel to equipment.
But generally speaking, although it is often said that a company's most valuable assets are their employees, employees as such do not have a financial value attributed to them.
The use of the term 'asset' in the case of employees is therefore not strictly speaking true.
Yes, personnel are assets in as much as they contribute to whatever it is that the company manufactures, or the services that they provide; but to be a proper asset in the accounting term, that asset must have a specific financial value attributed to it, and must be fully owned by the company.
When a company calculates its worth in financial terms at the end of its fiscal year, any assets must be valued and included in the valuation of the business.
In some industry sectors, (the government sector for example), government establishments must undergo audits to verify the existence and value of the assets that they hold.
These audits are often carried out by independent, approved outside agencies, and in order for these agencies to be able to recognise and quantify the assets, they must be clearly recognisable and identified.
For this reason all government establishments will have an asset register, as will many companies within the private sector too.
The best way of facilitating the audit of assets is to use a system known as asset tagging.
Basically asset tagging means no more than attaching asset labels to the items that are qualified as being assets.
Almost anything that has a financial value can be quantified as being assets, however most companies will have a benchmark which is usually a specific financial value, above which an item can be recorded in the asset register.
This value will of course change from business to business and industry to industry; for example in the manufacturing industry, the lowest value at which property can be considered for inclusion on the asset register may be £250.
Once an item is accepted as an asset, and depending on its financial value, it will be subject to depreciation in the accounting system.
This is both a way of reducing value in real terms, whilst also setting aside money within the accounts to replenish those assets once they become worn out.
To be of any use an asset label or asset tag must be durable, clearly visible, and carry relevant information that enables an asset to the readily identified and valued.
Asset tags come in a variety of shapes and sizes to enable them to be fixed to a wide variety of assets.
The best way of establishing which asset tags would suit your business best is to carry out a search online.
Assets can cover a great variety of things, from personnel to equipment.
But generally speaking, although it is often said that a company's most valuable assets are their employees, employees as such do not have a financial value attributed to them.
The use of the term 'asset' in the case of employees is therefore not strictly speaking true.
Yes, personnel are assets in as much as they contribute to whatever it is that the company manufactures, or the services that they provide; but to be a proper asset in the accounting term, that asset must have a specific financial value attributed to it, and must be fully owned by the company.
When a company calculates its worth in financial terms at the end of its fiscal year, any assets must be valued and included in the valuation of the business.
In some industry sectors, (the government sector for example), government establishments must undergo audits to verify the existence and value of the assets that they hold.
These audits are often carried out by independent, approved outside agencies, and in order for these agencies to be able to recognise and quantify the assets, they must be clearly recognisable and identified.
For this reason all government establishments will have an asset register, as will many companies within the private sector too.
The best way of facilitating the audit of assets is to use a system known as asset tagging.
Basically asset tagging means no more than attaching asset labels to the items that are qualified as being assets.
Almost anything that has a financial value can be quantified as being assets, however most companies will have a benchmark which is usually a specific financial value, above which an item can be recorded in the asset register.
This value will of course change from business to business and industry to industry; for example in the manufacturing industry, the lowest value at which property can be considered for inclusion on the asset register may be £250.
Once an item is accepted as an asset, and depending on its financial value, it will be subject to depreciation in the accounting system.
This is both a way of reducing value in real terms, whilst also setting aside money within the accounts to replenish those assets once they become worn out.
To be of any use an asset label or asset tag must be durable, clearly visible, and carry relevant information that enables an asset to the readily identified and valued.
Asset tags come in a variety of shapes and sizes to enable them to be fixed to a wide variety of assets.
The best way of establishing which asset tags would suit your business best is to carry out a search online.