Non-current assets and current assets are able to fully characterize the position of the property, business and investment investments of the enterprise.
Common subsystems for enterprise asset management
Today, asset management activities are focused on the financial management system. It is closely related to other management systems that exist in the enterprise. The following subsystems can be included in the enterprise management system:
- Production and sales activities, which are usually referred to as operational management.
- Innovation.
- Management and regulation of financial activities at the enterprise.
Non-current assets and current assets are included in financial management systems, therefore they are closely related to operational and innovation management. When preparing annual financial statements, it is necessary to take care of the calculation and reflection of indicators of the efficiency of the use of current and non-current assets. The finished analysis is recorded exclusively in an explanatory note, where accountants can evaluate trends andreasons for the efficient or irrational use of assets.
Principles of asset management
The following assets can be distinguished, which are based on such principles:
- Communication with a variety of areas in the field of financial management. Direct management of enterprise systems.
- Formation of a management decision that is complex. Non-current assets and current assets are used to have a direct or complex impact on the result of financial activity.
- Development and implementation of a system according to important criteria that provide opportunities for comparing a specific management decision. At the same time, the general financial policy of enterprises is involved.
- Orientation to create successful strategic goals for the further development of the organization.
Basic concept and types of enterprise assets
Assets are the totality of all possible rights to property that belong to the enterprise. As they are meant fixed assets, stocks, financial contributions, monetary claims that apply to an individual and legal entity.
In other words, assets are certain investments, as well as requirements. This term allows you to designate any form of ownership, as well as the property of an organization.
Assets can be divided into tangible and intangible. In turn, the former can include assets that do not havecash equivalent. They are able to satisfy the following conditions:
- Identification of property things.
- Application for the production of specific products, performance of important works or for the provision of services.
- Economic benefit and benefit to the organization.
Intangible assets refer to the business reputation of the enterprise and intellectual property.
Non-current asset management
The organization's non-current assets include important assets, equipment ready for further installation, intangible assets, and long-term cash and capital investments that have not been completed. If such assets were created at the initial stages of the enterprise, then in this case it is necessary to take care of ongoing management. It can be carried out in various forms and in numerous functional units.
Some of the tasks of managing such assets can be assigned to financial management. Enterprises can differentiate a variety of forms and methods for performing financial management of non-current assets.
Generally accepted classification
The following classification of non-current assets can be distinguished:
- Fixed assets of the enterprise. This includes structures, cars, vehicles, buildings and plantings that have been growing for more than three years.
- Capital investment. First of all, these are the costs that were aimed at improving the material and technical base,construction, modernization, and overhaul.
- Intangible assets. These include enterprise software products, copyright, trademarks, and patents.
- Financial investments of a long-term nature. This includes a variety of investments, securities, shares, as well as authorized capital.
Thanks to this classification, the company can use accounting accounts. Non-current assets are determined using the main cycle from the value of the circular turnover.
Features of current assets management
Turnover assets include such components as semi-finished products, various materials, raw materials and money. The main current assets are financial investments for a short period of time, manufactured products, as well as funds that are in the accounts. It is possible to single out the generally accepted classification of these funds:
- Based on materials. This includes the objects of labor and raw materials used, which serve as the basis for the manufacture of products.
- Manufactured item is subject to further circulation. It is made directly at the enterprise and is intended for further sale.
- Cash and investments. This group can include cash and non-cash payments.
Analysis of the composition of the current asset at the enterprise
The main and most important element for analysis is the composition of current assets. This is the most mobile part of anyavailable capital, on the current state of which the further financial condition of the whole enterprise depends. If the composition and structure of the current asset are in a stable state, then this factor indicates stability. That is, the production process and further sales of products are well established at the enterprise.
When there are significant changes in the composition and structure of organizations, we can talk about the unstable work of the organization. Indicators such as the composition and size of working capital in an enterprise relate not only to needs during production, but also to the need for their further circulation. To carry out successful economic activity, it is necessary to think about working capital. To perform calculations of the financial requirement in the area of working capital, you can use the following well-known methods:
- Analytical.
- Coefficient.
- Direct count.
Generally accepted structure of the current asset in the enterprise
The structure of current assets is the ratio between the amount of funds that is constantly in circulation and the main elements. Such indicators are influenced by the specifics of the implementation of a certain production process, supply and close cooperation with buyers and customers. To study the structure of current assets, it is necessary to take care of forecasting changes in the perspective of the composition of current assets.
It is possible to single out the principleson which the structure of working capital depends:
- Functional role is an important part of the production process. Cash plays a huge role.
- Liquidity. Accounting for the speed and speed of the transformation of goods, as well as products into cash.
- Accounting for possible degrees of risk from capital investments.
To perform an analysis of such a structure, it is necessary to determine the proportion of all constituent elements of working capital. Their total cost is also taken into account, where vertical analysis is used to calculate indicators. It is non-current assets and current assets that will help to fully analyze and determine the financial situation in the enterprise.
