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Asset Advisory

Industrial Consulting

Asset management is challenging, but with a well-thought-out asset strategy, you can maximise value and steer the business towards sustainable success. Asset advisory can help in addressing challenges of asset management faced by various industries.

At its core, asset advisory is a service designed to guide businesses through assessing, managing and optimising their physical and financial assets. The importance of asset advisory cannot be overstated. In an era of increased business complexity and economic volatility, understanding and optimising the value of your assets is critical. This service enables businesses to align their assets with their strategic objectives, ensuring that each asset adds value to the organisation.

Large and small businesses have to deal with a myriad of tangible, intangible, financial or non-financial assets. Without expert guidance, managing these assets can be a daunting task. An asset advisory service equips businesses with the tools and insights needed to manage their assets effectively, reducing the potential for financial losses and optimising performance.

At ValuStrat, our asset advisory consultants will aid you in achieving maximum efficiency and value from your assets, thus leading to improved overall business performance. Our objective is to offer insightful and strategic advice to navigate the complexities of the asset management journey.

Our comprehensive asset advisory services include the following:

Asset Residual Life Assessment: We provide insights into your assets' remaining useful life. This information is invaluable in planning replacements and ensuring operations continuity.
Asset Condition Assessment: Our experts carry out rigorous evaluations of your assets to understand their current condition, identify potential risks, and recommend preventative measures. We combine pure condition assessments with facility improvement analysis and modifications necessary to meet operational or program requirements.
Asset Counting and Tagging: We facilitate the accurate counting and tagging of assets, providing you with clear, reliable data to make informed decisions about your asset management strategy. Asset verification and tagging enable organisations to develop and implement Enterprise Asset Management (EAM). This helps you understand current asset portfolios, their location and how these assets change over time – keeping track of each fixed asset's detail, ensuring control and preventing misappropriation of assets.
FAR (Fixed Asset Register) Preparation: Every industry, from manufacturing to healthcare, non-profit to real estate, has unique financial and compliance risks in addition to potential tax consequences. With fixed asset management consultants, you can have peace of mind that your assets will be reported correctly, keeping your records and equipment lists up to date. Our team performs floor-to-book reconciliation of the fixed asset register supporting financial reporting requirements.
IFRS (International Financial Reporting Standards) Implementation: We offer expert guidance on the implementation of International Financial Reporting Standards (IFRS) to ensure compliance with global accounting practices.

How does asset advisory add value to the decision-making process of corporations and individuals?

Asset advisory serves a critical role in augmenting the decision-making capabilities of corporations and individuals. It employs sophisticated tools and methodologies to deliver strategic insights into asset valuation, management, and optimisation. This knowledge empowers entities to make well-informed choices concerning asset acquisition, utilisation, or disposal, thus maximising their value. Furthermore, it aids in comprehending market trends and risks, providing a robust framework for both short-term actions and long-term planning. Consequently, asset advisory is pivotal in bolstering financial health and operational efficiency, thereby adding significant value to the decision-making process.

What role does asset advisory play in assisting businesses during mergers, acquisitions, and partnerships?

Asset advisory is instrumental during mergers, acquisitions, and partnerships by providing invaluable insights into the assets involved. It aids in meticulously evaluating the assets' worth, including tangible and intangible items, revealing any latent value or potential liabilities. The resulting comprehensive assessment informs the negotiation process, enabling businesses to arrive at an equitable arrangement. Furthermore, it assists in strategic decision-making post-deal, such as asset integration, optimisation, or disposal. Thus, asset advisory underpins the entire transactional journey, ensuring that the businesses involved are well-positioned to maximise value and foster robust growth in their ventures.

How does an asset advisory service assist in the due diligence process of asset transactions?

Asset advisory services are integral to the due diligence process of asset transactions. They facilitate a comprehensive analysis of the asset in question, assessing its actual value and potential present and future risks. This includes an examination of physical condition, legal compliance, operational performance, and financial viability. It can also delve into intangible aspects, such as market conditions and strategic fit. The resulting thorough evaluation provides a strong basis for negotiation, minimising the risk of oversights or misjudgments. Therefore, asset advisory services effectively illuminate the way forward, empowering entities to make informed, strategic decisions in their asset transactions.

What are the benefits of a comprehensive fixed asset register (FAR) audit?

A comprehensive fixed asset register (FAR) audit offers several advantages. Firstly, it accurately represents an entity's asset base, reflecting the current state of tangible assets such as land, buildings, and machinery. This facilitates effective asset management, impacting acquisition, utilisation, maintenance, and disposal decisions. Secondly, it aids in financial reporting and tax compliance, as accurate asset values and depreciation rates are crucial for these processes. Furthermore, it helps detect fraud or misappropriation of assets. Overall, a thorough FAR audit contributes to operational efficiency, financial integrity, and regulatory compliance, thus proving vital for any business.

How can an asset advisory service contribute to effective financial reporting?

An asset advisory service significantly contributes to effective financial reporting by thoroughly and accurately appraising a company's assets. Accurate asset valuation ensures that balance sheets reflect the company's true financial position. The service can also aid in determining the appropriate depreciation rates, thus ensuring accurate profit and loss accounts. Moreover, it provides essential insights for impairment testing, a requirement under accounting standards. Such comprehensive and accurate reporting is beneficial for internal decision-making and enhances credibility with investors, lenders, and other stakeholders, thus elevating the company's financial transparency and integrity.

How does asset advisory contribute to insurance optimisation and risk management?

Asset advisory significantly contributes to insurance optimisation and risk management by accurately valuing the assets. This facilitates appropriate insurance coverage, ensuring that assets are neither underinsured nor overinsured, thus optimising premium costs. Additionally, it helps identify potential risks associated with the assets, which may include operational, legal, or market-related risks. This informs the development of effective risk management strategies to mitigate potential losses. Furthermore, an accurate and up-to-date asset valuation can expedite the insurance claim process in the event of a loss. Hence, asset advisory plays a vital role in safeguarding assets and optimising insurance expenditures.

What are the components of an effective asset impairment testing process?

An effective asset impairment testing process comprises several key components. Firstly, it involves identifying potential impairment indicators, such as significant changes in market conditions, technological advancements, or deterioration in asset performance. Subsequently, assets displaying such indicators are subject to detailed evaluation, employing relevant valuation techniques to determine their recoverable amount. This could be the asset's fair value less costs of disposal, or its value in use, calculated using discounted cash flow methods. An impairment loss is recognised if the recoverable amount is lower than the carrying amount. This comprehensive process accurately represents assets' value in financial statements.

How do asset advisory services contribute to compliance with international financial reporting standards (IFRS)?

Asset advisory services play a pivotal role in ensuring compliance with International Financial Reporting Standards (IFRS). By providing accurate and transparent asset valuation, they help companies adhere to key IFRS principles, such as fair presentation and substance over form. Specifically, they assist in the correct application of standards like IAS 16 (Property, Plant, and Equipment), IAS 36 (Impairment of Assets), and IAS 38 (Intangible Assets), among others. These services also aid in effective impairment testing and depreciation calculations, further aligning with IFRS requirements. Thus, asset advisory services are fundamental to the preparation of compliant, reliable, and consistent financial statements.

How does conducting a comprehensive review of a fixed asset register (FAR) provide added value to an organisation?

Conducting a comprehensive review of a Fixed Asset Register (FAR) adds value to an organisation by ensuring that its assets are accurately represented and optimally managed. This exercise verifies asset existence, condition, and valuation, facilitating sound financial reporting and tax compliance. It also aids in identifying obsolete or under-utilised assets, providing opportunities for disposal or improved utilisation. This, in turn, enhances operational efficiency and profitability. Furthermore, a well-maintained FAR minimises the risk of asset misappropriation and aids in insurance optimisation. Therefore, a comprehensive FAR review provides the essential foundation for effective asset management and financial integrity.

What is the role of IFRS in asset valuation and advisory services?

The International Financial Reporting Standards (IFRF) play a crucial role in asset valuation and advisory services by providing a consistent and reliable framework for recognising, measuring, presenting, and disclosing assets. For instance, IFRS guidelines stipulate methods for valuing assets such as property, plant and equipment (IAS 16), intangible assets (IAS 38), and impairment of assets (IAS 36). They also dictate principles for asset depreciation and disposal. By adhering to IFRS, asset advisory services ensure that asset values are transparent, comparable and reliable, supporting accurate financial reporting and informed decision-making, thereby enhancing financial integrity and stakeholder confidence.

How does the asset lifecycle management process align with IFRS standards within an asset advisory context?

Within an asset advisory context, the asset lifecycle management process aligns closely with IFRS standards. It begins with asset acquisition, where the cost is recognised following IAS 16 (Property, Plant, and Equipment). During the utilisation phase, depreciation is calculated in accordance with the same standard. Periodically, assets are tested for impairment as per IAS 36 (Impairment of Assets), adjusting their value if necessary. Upon disposal or retirement of assets, any gain or loss is recognised following IAS 16 or IAS 38 (Intangible Assets). Hence, when aligned with IFRS, asset lifecycle management ensures the accurate representation of assets' value throughout their lifespan.

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