Introduction
This 5-day training course is designed for the participants to have a comprehensive understanding and control of the complete cycle of fixed assets from capital budgeting to fixed assets retirement. The accounting and management of fixed assets is deemed essential as fixed assets play as the major resources for production and generation of benefits. This course covers all lifecycles of fixed assets from creation or acquisition to utilization and maintenance until renewal or disposal. Participants will have the knowledge about the 28 points of the British Standard Institute Publicly Available Standard (PAS 55) which help capitalize the utilization of fixed assets which are divided into: fixed assets policy, strategy, management enablers and controls, implementation of management plans, performance assessment and improvement, and management review.
The management part of this course deals with the decision-making tools such as NPV, IRR and other capital budget comparative tools used to decide whether to acquire, replace or refurbish assets. While the accounting part is based on the International Financial Reporting Standards (IFRS), mainly standard number 16 for property plant and equipment, and IFRS 38 for intangibles. This also includes capitalization rules for fixed assets and intangibles, and rules for measuring assets at fair value. In addition, the course covers various depreciation methods and assets impairment rules, measurement and accounting.
Objectives
- To gain knowledge about accounting properly for impairment, disposals, and sales of long-lived assets
- To evaluate organization’s investments in fixed assets according to Net Present Value (NPV), Internal Rate of Return (IRR) and other methods
- To apply the 28-point requirements to establish a whole life asset management system according to PAS 55 and ISO 55000
- To justify the accounting and reporting for transactions throughout the life of the assets
- To recognize and correctly measure fixed assets and intangible assets under International Financial Reporting Standards (IFRS)
Outline
Day 01
- Asset management function
- Introduction to British Standards Institute’s PAS 55
- Introduction to ISO 55000
- Asset management objectives
- Asset management benefits
- Requirements of PAS 55 for effective asset management
- Risk management and asset management
Day 02
- Evaluating investments in assets
- Making investment decisions
- Time value of money
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- Other tools for valuing investments
- Fair value measurement
- IFRS 13 fair value
- Three-level hierarchy for Fair Value (FV)
- Valuation techniques under IFRS
Day 03
- Initial measurement of long-lived assets
- Measurement and recognition of fixed assets
- Classes of long lived assets
- Construction of tangible assets for internal use
- Measurement and recognition of investment property
- Measurement and recognition of intangible assets
- Required disclosures
- Special topics in accounting for fixed assets
- Capitalization of borrowing costs
- Decommissioning costs
Day 04
- Accounting over the life of the asset
- Costs incurred subsequent to purchase
- Leasehold improvements
- Accounting for leased assets
- Subsequent expenditures on intangibles
- Accounting for assets under fair value model
- Concept of component depreciation o Depreciation methods
- Partial-year depreciation
- Straight-line depreciation method
- Units of production method
- Accelerated depreciation methods
- Revising depreciation rates
Day 05
- Impairment and disposal
- Definition and rules of asset impairment
- Impairment measurement and accounting
- Impairment indicators and computation
- Accounting for disposing or idling of assets
