20 practical cases to manage the fixed assets of your company
Fixed Asset Management In Constructions Companies
Monitoring the role of Fixed Asset Cycle; Your company has a hard task especially when there are many of them, these assets take the form of buildings, cars, equipment, computers and furniture.
?What do Fixed Asset mean and what is the meaning of depreciation
The assets acquired:-by the company for use in production processes and not for sale, such as (land, buildings, machinery and equipment, cars,electronic equipment, furniture and furnishings) are used for more than one financial period,
depreciation:- is the distribution of the original cost over the periods of the fixed asset
?What is the difference between capital expenditures and expenses
Capital Expenditure :- Are the expenses that lead to an increase in the life span of the original or increase the production capacity and are distributed to the periods in which the asset will be used, such as the equipment renewal. The balance is shown in The Financial Statement
Expenses :- Are periodic expenses that are disbursed to maintain the efficiency of the original and are expenses for the financial period such as periodic maintenance - oil spare and are locked inThe income statement
What are the criteria for distinguishing between Capital expenditure and expenses?
- .The time criterion:- expenses serves more than a year is capitalized
- .The productive capacity criterion:- expenses increases production capacity is capitalized
- .Relative importance criterion:- the amount of the expense if the amount is large is capitalized
The fixed assets management practical cases
Purchase of the original; on 01/03/2016, was purchased a car half transfer Isuzu No.3765 Model 2017 for 145,000 pounds from The united company. For purchasing cars have three possibilities to buy cash - cheque - on the account
Proof of purchase of the car in cash from the main fund
Buying the original in installments; Assuming that the purchase was in installments of 20 installments each value of 7.280 pounds cheques payable first every month in this case is proved to be the account and then closing the supplier account in the payable notes.
Buy the car on the supplier account
Closing the supplier account with payable notes
On 01/04 / 2016 we received a notification from Saudi French Bank to deduct the value of installment No 1 in the amount of 7,280 from our current account
Payment of the first installment of the French bank
Upon the payment of installment No 2, it was agreed to pay the early installment of the date in exchange for a discount of 280 pounds and was paid in cash
Payment of the second installment with a discount
On 01/09/ 2016 m was the work of the age of the machine car and the amount of 56,300 pounds and was paid in cash is the value of life increase the capacity of the original is treated as capital expenditure
Payment of the car machine renewal in cash
At the end of each year, fixed assets depreciation are closed at the original depreciation, since the asset was purchased on 01/03/2016 and the budget is prepared on 31/12/2016. The working period is difference between the dates (31/12/2016 : 01/03/2016)= 306 days.
Depreciation value = Cost of original x Working time / 360 x 20%
Value of depreciation = (145600 + 56300) × (306/360) × 20% = 34,221 pounds
Proof of fixed assets depreciation for the financial year
Note that the depreciation value was charged to the general and administrative expenses on the basis that it is an unspecified expenses. The cost center and the supposed loading the costs of each cost center required to determine the number of working days of the car in each site, for example ( sewage project 150 days -general administration 26 days ) Depreciation is distributed as follows:
Prove of depreciation of fixed assets for the financial year
The sale of an asset with the carrying
amount of the asset; Now =the cost of the original - the depreciation complex
= 201,300 - 34,221 = 167,079 pounds
in the case of selling the original amount of 170,000 pounds in this case the original profit of 2,921 pounds.
Prove the sale of fixed assets with profits
Sell original with loss; In the case of selling the original amount of 16,000 pounds in this case, the original loss of 7,097 pounds. Accounting treatment in this case.
Prove the sale of fixed assets with the achievement of losses
Using of the car in person; If the car is withdrawn from the company for the family of the owner of the company accounting treatment in this case.
Prove the withdrawal and load it on the owner
Assuming that the car has an accident, what is the correct procedure for this car and how to send it to the scrap store? In the event that the accident is outside the will of the driver, the company bears all losses from the accident, although the driver is the reason the driver is loaded with a percentage of losses or the full amount according to the vision of the administration
Prove the exclusion of the vehicle and send it to the scrap store
When carrying out the annual inventory of fixed assets, the inventory officer found that the car was no longer suitable for anything? But it is still within the fixed assets and decided to get rid of them. What the accounting treatment? The same idea of the previous question is estimated the value of the car as scrap and excluded from the fixed assets and scrapped in the scrap store until sold again.
Prove the exclusion of the vehicle and send it to the scrap store
When you have a fixed assets inventory, some assets are actually not registered for you to disclose the assets and have not found their documents, how they will handle them? This estimate is estimated at 105,000 pounds
Proof of the car not registered in the books
There is a fully consumerized asset and there is no value in the books, but this is valid for use. What is the accounting procedure? The asset is revalued with a revaluation of EGP 105,000 which is recognized as a fixed asset valuation reserve.
Prove the vehicle revaluation
Operating expenses; In this case of drainage on the car from Hassan Fathi custody, for example: (550 fuel- 450 spare parts - 2000 driver's salary. What is the accounting guidance in this case?
There are two directions
the first direction:- that the expenses are charged to the project in which the vehicle operates
Proof of loading projects with operating expenses
The second direction:- is to deal with the car as an independent cost center that carries the expenses and revenues up to the profits and losses of the vehicle or car and it's useful in the transport companies or the company that has equipment to be rented to others.
Proof of charging the car with operating expenses
The machine operating revenue:-
we deal with the car as an independent cost center that worked for the company to calculate the number of working hours × the daily price and considered the revenue of the stomach and the cost of rent cost on the project assuming that it worked for 10 days in the project Khalid bin Walid School daily car 300 pounds
cost of the car = 3000 pounds Accounting guidance in this case.
Prove the car operation for company projects
In the case of operating the vehicle for others, for example, the subcontractor worked for the supply of plumbing for 5 days at 700 pounds per day accounting guidance in this case
Prove the car operation for a subcontractor
In the case of transfer of materials from the company to others in this case, the third party carries the value of the materials and the value of the transport fee. For example, it was agreed to transfer 25 tons of cement at price of 600 for tons and transfer fee per ton is 10 pounds per contractor Imdad company for plumbing works.
Prove the transfer of materials by car from the company's store
All this cycle is done through Babel program in simple steps. The program provides you with complete management of the equipment from recording equipment expenses and operating extract of the equipment in addition to complete management of fixed assets from registration of all data, processing depreciation of fixed assets and loading them on projects and monitoring the end dates of the license, insurance, And the custody of.
To learn more about asset management, equipment and transportation
Detailed report on fixed assets
Detailed report for fixed assets depreciation
Detailed report to monitor asset end date