Fixed assets are items that a company purchases for long term use in a business or organization such as IT equipment, furniture, automobiles, land, buildings, and machinery. Accounting teams must revalue these assets on a regular basis to ensure that the right or most accurate costs are included on the books when it comes to audit time or budgeting for the next year. The depreciation of fixed assets is an accounting method of allocating the cost of a tangible asset over its useful life.
As assets lose their value over time due to excessive use, general wear and tear or accidents/misuse, the diminished value needs to be acknowledged and included for how long the asset is a viable use for the company. If companies are spending more time repairing an item over and over or it’s simply not performing up to par, then the option to completely replace the asset or maybe discontinue its use in the business needs to be evaluated. Valuing these assets each year can add up to considerable cost savings, and in today’s competitive business environment, every penny counts.
Many companies use a depreciation tool to determine the value of an asset and how it is decreasing over time. Depreciation is often added into the cost of daily operations or production activities, so it does play a very important role in determining how a company spends its dollars. When it comes to looking at repurchasing a product or completely replacing an existing one with a new version, having the relevant data on the entire lifecycle of an asset from how many times it’s used, to its maintenance and repair history is vital to determining what direction to go.
Calculating the depreciation of fixed assets enables businesses to match a portion of its cost to the revenue that it generates. If a company does not account for depreciation of its assets year after year, the total cost of a fixed asset will be inaccurate as time goes by, resulting in a misleading report of the profitability of your business. Conducting frequent fixed asset audits empowers companies to make important decisions based on the latest and most accurate data. Properly recording the depreciation of fixed assets becomes extremely important when preparing balance sheets and tax reports.
Having an accurate, customized and efficient asset tracking and management tool is one of the most important and reliable ways for companies to track their assets and keep up with the depreciation of fixed assets. Asset Panda is that perfect partner.
Asset Panda is a flexible tool, enabling companies to tie their assets to multiple books or kits. The tool includes configurable reporting for compliance, straight line depreciation, and asset appreciation calculation.
From the palm of your hand or on the web, Asset Panda gives you real-time information on the check- in/check-out status of equipment, what condition those items are in, their repair histories and maintenance schedules. The information upon which your accounting and compliance teams need is within easy reach. You can generate automated, customized reports and communicate when items need repair or replacement.
Asset Panda’s tracking capabilities vastly improves the management and integrity of your asset-related information, eliminating the human error associated with manual processes, and taking the guesswork out of repair and replacement decision-making. Asset Panda’s simple and powerful platform empowers you to track your assets how you want, saving significant and measurable time and money.
Help out your accounting teams and set up a free 14-day trial of the best fixed asset system tracking platform that adapts to the way you work. Contact Asset Panda at www.assetpanda.com for more information.
Check out how Asset Panda expedites the audit process for users in a timely manner which is important in gathering data for evaluating the depreciation of fixed assets.