ASSET MANAGEMENT/

MAINTENANCE OF
ASSET REGISTERS

Assets Register

The maintenance of Assets Register of All the

Public Sector Undertakings is a statutorily
requirement as per Indian Company's Act
1956.
Assets Two Types
Current assets : Cash in hand, Amount
receivable from other organization, Bank
Balance. (shown in the Balance Sheet)
Fixed assets: Infrastructure of the company
such as Land, Building, Apparatus & Plants

Fixed assets

Tangible assets: Tangible assets are those

assets having physical substance that can be seen
and touched like Buildings, Plant and machinery

Intangible Assets: Intangible assets are those

assets that are not having any physical substance
but however future economic benefits are
expected to flow from them to the enterprise viz.
goodwill, trademark, computer software, IPR,
Patents

Company expenditure

On the basis of nature of activities, the expenditure

incurred on behalf of company will either be
revenue expenditure or capital expenditure
The capital nature of expenditure is initially booked
under Inventory, Work in Progress or directly
under Fixed Asset
Fixed Asset - the depreciation on such assets starts
the date of booking under Fixed Asset .
if capital nature of expenditure is booked under WIP
or Inventory, the depreciation does not start till the
transfer of such expenditure to Fixed asset.

Consideration of Fixed Assets:

Guidelines

Capital Expenditure Items

Eg. Expenditure incurred for

Installations Commissioned
Land and Buildings
Vehicles
Standby equipments
Addition and Alterations

Revenue Expenditure
Eg. Expenditure incurred for

Shifting and re-installation of existing assets

Consideration of Fixed Assets:

Guidelines

Capital Expenditure Items

Expenditure on replacement of assets,
equipments, instruments and rehabilitation
works can also be capitalized, if in the opinion of
the management, it results enhancing the
revenue earning capacity. For this Management
Certificate is required for record.
Treatment of Work in Progress as Fixed Assets:
For capitalizing & taking into accounts as fixed
assets, Management Certificate will be
issued by the Management

Depreciation:

Depreciation means a fall in the quality, quantity

or value of an asset
Causes of depreciation
Wear and tear due to actual use
b) Efflux of time- mere passage of time will cause
a fall in the value of an asset even if it is not used.
c) Obsolescence- a new invention or a permanent
change in demand may render the asset useless;
d) Accident; and
e) Fall in market price.

Depreciation:

The fact to remember is that except in a few

cases ( e.g. land and old paintings) all assets
depreciate
Full depreciation is charged on Capital
expenditure up to Rs.5, 000/Income Tax Act, 1961 provides for 100 %
depreciation on those items of plant and
machinery whose actual cost does not exceed
Rs. 5,000 each
MSTC (Metals and Scrap Trading Corporation).

Methods for Providing Depreciation

In BSNL depreciation is provided on written

down value method. Under this method, the
rate or percentage of depreciation is fixed, but
the first year, depreciation is written off
proportionate to the actual period in use. The
Depreciation on the Rs. 20,000- the cost of the
asset- at the rate of 10% will be Rs. 2000 in the
first year. This will reduce the book value of the
asset to Rs. 18,000. Depreciation in the second
year will be Rs. 1800 i.e. 10% of Rs. 18000/-.

Rate of Depreciation in BSNL

5%
13.91%

Building
Lines & Wires, Installation Test
Equipments, Masts & Aerials,
Office
Machinery & Equipment ,
Electrical Fitting
& Appliances
15.33% Apparatus & Plants, Cable
18.10% Furniture & Fixtures
25.89% Motor Vehicle & Launches
40%
Computer
45.8%
Subscriber Installations

Terminologies Associated with Assets

Non Performing Assets: An asset which is

producing no income.
Obsolete Assets: The Asset which has outlived its
economic life, or due to change of technology it is not
useful to generate revenue
Unserviceable Assets: The asset which is not useful
for the department being beyond economic repairs
and as such is not useful for generating revenue.
Surplus Assets: An asset may be treated as surplus
when the same is in excess of requirement for a
specified period.

Inventory

Non Moving Inventory: If an item is lying in

stock/depots continuously for more than three
years without any issue.
Slow Moving Inventory: when only 10% to
15% of the said items in stock are issued each
year for a period of 2 to 3 years continuously.

Questions ?

Thank You