Non-current assets and current assets are able to fully characterize the situation of property, business and investment of the enterprise.
Common subsystems for asset management in the enterprise
Today, asset management activitiesis aimed at 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 marketing activities, which are usually attributed to operational management.
- Innovative activity.
- Management and regulation of financial activities in the enterprise.
Non-current assets and current assets are included infinancial management systems, therefore, are in close connection with the operational and innovative management. When the annual financial statements are prepared, care must be taken to calculate and reflect the efficiency indicators for the use of current and non-current assets. The finished analysis is written exclusively in the explanatory note, where accountants can assess trends and the reasons for the effective or unsustainable use of assets.
Principles of Asset Management
We can distinguish the following assets, which are based on such principles:
- Connection with various directions in the field of financial management. Direct management of enterprise systems.
- Formation of a management decision thathas a complex character. Non-current assets and current assets are used to provide a direct or comprehensive impact on the result of financial activities.
- Development and implementation of the system on important criteria that provide opportunities for comparing a specific management solution. At the same time they use the general financial policy of enterprises.
- Orientation towards the creation of successful strategic goals for the further development of the organization.
The basic concept and types of enterprise assets
Assets - a common set of all sorts of rightson the property that belongs to the enterprise. As their mean fixed assets, inventories, financial contributions, monetary claims, which are imposed on a physical and legal person.
In other words, assets are certain investments, as well as requirements. This term allows you to identify any forms of ownership, as well as property of the organization.
Assets can be divided into tangible and intangible. In turn, the first can be attributed to assets that do not have a monetary equivalent. They are able to satisfy the following conditions:
- Identification of property.
- Application for the production of specific products, performing important work or for providing services.
- Economic benefits and benefits for the organization.
Intangible assets relate to the business reputation of the enterprise and to objects of intellectual property.
Management of non-current assets
Non-current assets of the organization includeimportant funds, ready-made equipment for further installation, intangible assets, 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 permanent management. It can be implemented in a variety of forms and in numerous functional units.
Some tasks for managing such assetscan be entrusted to financial management. Enterprises can differentiate various forms and methods for performing financial management of non-current assets.
The following classification of non-current assets can be distinguished:
- Fixed assets of the enterprise. This includes buildings, cars, vehicles, buildings and plantations that have been growing for more than three years.
- Capital investments. First of all, these are costs that were aimed at improving the material and technical base, construction, modernization, and capital repairs.
- Intangible assets. These include software products of the enterprise, 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, you can use accounting accounts at the enterprise. Non-current assets are determined by means of the main cycle from the value of circular turnover.
Features of management of circulating assets
Turnover assets include suchcomponents, like semi-finished products, a variety of materials, raw materials and money. The basic current assets are financial investments for short terms, produced products, as well as funds that are on the accounts. One can single out a generally accepted classification of these means:
- Based on materials. This includes used items of labor and raw materials, which serve as the basis for manufacturing products.
- The manufactured goods are the subject of further circulation. It is manufactured directly at the enterprise and is intended for further implementation.
- Cash and investments. In this group, you can include cash and non-cash settlements.
Analysis of the composition of the current asset in the enterprise
The main and most important element for conductinganalysis is the composition of current assets. This is the most mobile part of any available capital, from the current state of which depends the further financial condition of the whole enterprise. If the composition and structure of the current asset are in a stable state, then this factor speaks of sustainability. That is, the company is perfectly adjusted to the process of production and further sales of products.
Когда в организациях отмечаются существенные changes in the composition and structure, then we can talk about the unstable work of the organization. Such indicators as the composition and size of current assets in the enterprise relate not only to the needs during production, but also the need for their further treatment. To carry out successful economic activities, you need to think about working capital. To perform calculations of the financial requirement for working capital, you can use the following known methods:
- Direct account.
The generally accepted structure of a current asset in an enterprise
The structure of current assets isthe ratio between the amount of funds that is constantly in circulation, and the basic elements. These indicators are influenced by the specifics of the implementation of a certain production process, supply and close cooperation with customers and customers. To study the structure of current assets, it is necessary to take care of forecasting changes in the outlook of the working capital composition.
You can highlight the principles on which the structure of working capital:
- The functional role is an important component during the implementation of the production process. A huge role is played by cash.
- Liquidity. Accounting for the speed and speed of transformation of the goods, as well as products in cash.
- Accounting for the possible degrees of risk from capital investments.
To analyze 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 fully analyze and determine the financial status of the company.