One question that comes up when implementing any type of fixed asset program, “Is software a fixed asset?” By definition, any tangible item not consumed within one accounting cycle (typically a year) and providing long-term utility is referred to as a Fixed Asset. In the world of accounting, it is a common practice that if you purchase custom designed or industry-specific software, then this should be classed as a fixed asset in your office equipment section.
To be classified as a fixed asset the item in question, such as software, must pass two tests. The first test is tangible in nature. This means it must have physical characteristics. Simply put, software is used regularly (i.e. daily) and it also generally requires maintenance like equipment, which allows it to be considered tangible.
The second test is the consumption period. If the item will be consumed or used over an extended period of time, i.e. longer than the traditional accounting cycle (one year) a calendar year, it may pass the 2nd part of the test. However, keep in mind that if the item is purchased and is used up as a part of the product you sell or service you render, it is not a fixed asset, but inventory in nature.
It’s important to recognize that the right fixed asset software, such as Asset Panda’s cloud-based tracking platform, will do so much more for your business than just help you track your vital assets. It gives you and your employees back invaluable time, increases accountability and protects your bottom-line revenues. Accounting and compliance teams require information about your fixed assets, including software used in the company, and if that data is inaccurate, your organization could face penalties.
Traditionally, companies have kept spreadsheets to track the whereabouts and condition of their IT assets. Those spreadsheets are subject to a multitude of errors. But incorporating a fixed asset tracking program like Asset Panda, you now have a platform unrivaled by any in the industry for its power, customization capabilities, simplicity and price point right at your fingertips. Employees have real-time access to the location, condition and other data for each of your IT assets. Asset Panda eliminates the use of spreadsheets, expensive hardware scanners and expensive software and is the most flexible and customizable in the industry.
With Asset Panda, every account is a premium account, meaning every feature comes standard. Try it yourself with a free 14-day trial, and you’ll understand why some of the biggest brands trust Asset Panda for their asset tracking needs. For details, visit assetpanda.com.