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What is an Asset? - Asset Types and Asset Subtypes

Current Assets are assets that will be, or can be, consumed within a financial period or readily turned into cash such as cash on hand or at the bank, investments and inventory purchased for sale.

 

Non-current Assets are items that have a financial value deemed to be utilized during more than one financial period. These include physical assets (such as Land, Buildings, Motor Vehicles, Bridges, Plant and Equipment) and intangible assets (such as software and intellectual property).

 

Infrastructure assets (non-current assets) owned and managed by organizations (such as Federal, State and Local Governments and Water, Road, Rail, Port and Power Authorities) will vary significantly in their design and function.

 

Some examples include a State Authority that owns and manages a series of Buildings such as Art Galleries providing a service to exhibit artworks to the wider community and its visitors, or Courtrooms providing the service of adjudicating legal disputes or a Telecommunications company that owns and manages a mobile phone tower to provide coverage services for its mobile phone customers.

 

Until such time as the service is no longer required, these physical assets will need to be managed, maintained and replaced during the course of their life. Refer to the Asset Life Cycle article for further information on this subject.

 

In addition, there is an accounting requirement to financially record and report on assets, which will be further explored in subsequent Accounting Topics.

 

Assets in the Brightly Assetic Asset Register

The Assetic asset register is used to cater for Non-current Assets; also referred to as ‘fixed assets’ by some industries.

Typically, there are three situations regarding how assets are recognized and maintained in the Assetic asset register, as follows (noting that Asset Management Purposes can relate to strategic and/or maintenance management functions): 

 

Referred to as ‘Asset’ in the Brightly Assetic register

Asset – Held in Register for Financial and Asset Management Purposes

• A physical item whose financial value meets or exceeds the organizations capitalization threshold;
• The asset possesses service potential and/or future economic benefits that the organization will utilize during more than one financial period;
• The asset is controlled by the organization; and
• The asset originates as a result of a past transaction or event, i.e. constructed by the organization or gifted to the organization by a developer.

 

Referred to as ‘Notional Asset’ in the Brightly Assetic register

Asset – Held in Register for Asset Management Purposes Only

• A physical item whose financial value is below the organizations capitalization threshold (no financial information is recorded against the asset within the asset register);
• The asset possesses service potential and/or future economic benefits that the organization will utilize during more than one financial period;
• The asset is controlled by the organization; and
• The asset originates as a result of a past transaction or event, i.e. constructed by the organization or gifted to the organization by a developer.

 

Referred to as ‘Notional Asset’ in the Brightly Assetic register

Asset – Held in Register for Information Purposes Only

• A physical item (no financial information is recorded against the asset within the asset register);
• The asset possesses service potential; and
• The asset is controlled by another organisation such as State Road, State Water or Private Water Authorities.

Asset Type and Asset Subtype

For strategic asset management and maintenance planning purposes, typically, the type of asset will utilize the Asset Type and Asset Subtype attribute fields.

 

The Asset Type is used to record the type of asset being registered in the Asset’s Register taking into consideration its function in its service delivery.

 

The Asset Subtype is used to further refine this type to capture at a subgroup level, the assets that have a specific design and/or function. An example being that we can use Shed as our Asset Type to record asset details and report on the number of all Sheds. However, if we want to search and report on the number of Sheds that have the same design and/or function, we use the Asset Subtype to capture this information. In this example, we would utilize subtype attributes to distinguish a garden shed, from a storage shed to a chemical storage shed to a pump shed.

 

Asset Types and Subtypes.xlsx, provides a typical Asset Type and Asset Subtype list that has been configured for use as a default in an Assetic Assets Register. This is not intended to be a definitive list, as these assets can vary pending on your organization’s business needs and/or statutory financial reporting requirements.

Should you have a need to create additional Asset Types and Asset Subtypes, refer to the Asset Types article, for the step by step guide.

It must be noted that the Asset Type and Asset Subtype attribute details must exist within the Assetic Asset Register prior to creating an asset within the Asset Register.