BOBZBLOGZ
ASSET REGISTERS
SAMANIEGOMORGAN
BOBZBLOGZ A Series of Informal Articles from a British Architect working from The Philippines. Bob Morgan has worked in the UK, throughout Europe, the Middle East and South-East Asia. He established his own Practice near Manila in 2010.
BLOG 01-02 January 2020
ASSET REGISTERS – Yawnnnnnnn! Beware the Knock at the Door!
INTRODUCTION The following article deals with importance of the Asset Register – This is not just specific to Architects, but is essential to most businesses. Here we deal with its importance related to Insurance, Inspections for Tax & VAT and Civil Enforcement. I know that this is ‘Dark Territory’ for most – However, once informed about such issues, the ‘Darkness’ can become quite ‘Illuminating!’
SMALL PRINT It did not take long for the Legal Profession of The Philippines to determine that a Foreign Architect can be ‘Chased for Money!’ – Just like an Ambulance being pursued by a Personal Injury Lawyer! – Or a ‘Dog with a Postman’s Leg!’ ‘Attorney’ appears to be one of the most common Forenames in The Philippines, just as in India where ‘Engineer’ is used as a Title along with Mr and Mrs, and in Saudi Arabia where ‘Prince’ is a common epithet! Therefore, take heed of the following! Viz., All opinions expressed are purely those of the Author and are NOT Open for Debate! ANY and ALL Advice given, and Perceived as Advice on BOBZBLOGZ might have been presented based upon an Analysis of Minimal Factual Information, and has NOT been provided for a Fee under Contract! Moreover, NO Contract shall be inferred. Neither has Information been provided for Specific Purposes. Following such Advice is at the ENTIRE RISK of the Reader! I have Zero Personal Wealth! – Hence Litigation would be Ill-Advised! Alternatively, I am available for Commissions executed under a Formal Commissioning Agreement.
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Beware the Knock at the Door! The ‘Knock on the Door’ can happen at any time! – Often, this can begin from an innocent request during a Tax, PAYE (Employer Statutory Contributions) or VAT (Sales Tax) Visit, in order to determine the Ownership, Valuation and Depreciation of Assets. In other instances, Court Enforcement Officers can descend without prior notice. However, of greatest concern to most will be a Detailed Asset Register for use in the justification of Insurance Claims.
INSURANCE This is quite possibly, the main reason for initiating and maintaining an Asset Register. Should disaster strike, then Substantive Records will be required in order to justify an Insurance Claim. In most instances, the Insurer will require evidence of Purchase, Maintenance, Value, Depreciation and Replacement Cost. This could also be a Condition of the Insurance Policy. Failure to keep adequate records could result in claims being discounted heavily, or declined completely. Needless to say, the Asset Register should be stored away from the Insured Premises.
Insurers will also be making comparisons with similar organisations. However rarely, does the ‘One Size Fits All’ approach work – Therefore, it will be incumbent upon YOU to demonstrate this, and why your business is different from the norm. This should be carried out prior to any Policy being initiated – Should there be Resistance, then there are always other Insurers to consider! In the case of Substantial Claims, the Insurer might well ‘Distance’ himself from the Policyholder by appointing a ‘Loss Adjuster.’ It is the job of the Loss Adjuster to Mitigate the Claim, and his fees are calculated accordingly. In such instances the Claimant might well need to appoint a ‘Claims Assessor.’ However, in all instances both the Success and the Value of the Claim will be reliant upon Documentary Evidence. Dependent upon territory, the terms Loss Adjuster and Claims Assessor can be synonymous. In others, they are distinctly different. However, in general terms the Loss Adjuster is engaged by the Insurer, and the Loss Assessor by the Insured. A Claim made for Loss of Property could well be accompanied with a Claim for either the Loss or Disruption of Business. Again the same Rules of Evidence apply; with the onus being upon the Policyholder to demonstrate the Loss. BLOG 01-02 January 2020
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The Small Print of the Policy becomes the ‘Devil in the Detail!’ As many will attest, you only find out the true meaning of the term ‘Fully Comprehensive’ at the time of making a claim! Disaster Preparedness Policies can work in the Policyholder’s favour. Adequate, Reasonable, and Rehearsed Plans to Relocate at a Time of Crisis, could be reflected in Premiums. If this has not been declared to a Broker or Insurer, then simply ask, and/or reconsider your options. Policies and Policy Conditions should also be reviewed on an annual basis – And, always let your Insurer/Broker know that you are carrying out this exercise.
Managing the Claims Process YOU CONTROL IT! The Claims Process, in many instances, will be at least ‘Tortuous!’ For my own part, ‘Should’ a disaster occur, my Practice Manager will be the Primary and Key Point of Contact. Firstly, he is aware of all details, financial and otherwise related to the Practice, and was instrumental in preparing our Asset Register. Secondly, this would release the Partners and Staff to get on with Work and/or Relocation! In most instances he will require a Letter of Authority, signed by both Partners. Each Insurance Company will have its own protocols and procedures. However, there are some General Aspects, that seem relatively common. Following a disaster, the first job will be to Register the Claim. Even in this day and age of Internet and Online Forms, Insurance Companies will prefer a more traditional route, relying upon the Postal Service. In the UK the forms might arrive the following day. However, for The Philippines Office that could take over a week to arrive from Manila to Antipolo. Therefore, my Practice Manager will collect the forms By Hand. Some considerable research might be required in order to determine an approximate value of the Claim. A Photographic Record will be required, and possibly Witness Statements. Some liaison with the Local Police and Civil Defence might also be necessary. Therefore, a Holding Letter can be issued, acknowledging receipt, and advising that the Claim Submission will be imminent. This demonstrates your own level of Due Diligence. Once prepared and completed, the Claim will be Returned by Hand, and a Receipted Copy will be required. There will also be a Covering Letter, briefly describing events, the nature of the Claim, and the fact that the Practice Manager has been Nominated as the Point of Contact. From returning the Claim and Covering Letter, all correspondence will be monitored on a daily basis. Usually, the lodging of the Claim will generate ‘Initial Total Silence!’ However, be aware that the Insurer has to be certain of the Policy, Premium Payments, Cover and the Bona-Fides of the Claimant. It is then common for a Representative of the Insurer to visit, although this will probably be a relatively cursory inspection, merely to determine that the event ‘Happened!’
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It should be noted that in cases of Arson and other Criminal Acts, nothing will proceed until Preliminary Reports have been received from the Local Police and Civil Defence. Where Death has occurred, the Coroner’s Office will also be involved. However, this situation still requires monitoring, as the usefulness of Physical Evidence deteriorates with time. The Insurer may then decide whether to handle the Claim themselves or involve a Loss Adjuster. The Insurer and/or Loss Adjuster will commence an Enquiry Process. Invariably, questions will be asked both Randomly and Individually! Questions might also be irrelevant, as the information has already been given as part of the Claim, or is available from other sources. From this point, the Insurer and/or Loss Adjuster should be invited to a Meeting where ALL Questions, Enquiries, and Requests for Information can be dealt with at One Sitting! If this is not done, then their Enquiry Process will become even more protracted. And, as more information is being generated, Questions will be asked of Responses – Leading to further Questions! The Strategy at this point should be to keep the ‘Big Picture’ in mind, within the Broad Headings and Values of the Claim. This should not become ‘Obfuscated’ with trivialities. More detailed information can be dealt with at a Secondary Level. Concurrently with this process, the ‘Business’ should be making, demonstrating and recording its Recovery Progress. Inevitably, a point will be reached where the Insured cannot move forward without the Relief of Settlement, and this MUST be recorded. However, there is little point is sitting back and waiting for events to take their course. The Initial Outcome of the Claim will probably be an ‘Offer to Settle.’ This will inevitably fall far short of the Financial Claim! The Insurer might well have ‘Supposed’ that with the passage of time, the Insured is becoming more desperate for a Settlement. However, your efforts to reinstate and carry on the business should now be bearing fruit – Temporary Premises etc. Therefore, their offer can be Rejected. Within the Letter of Rejection, there should be a clear and definite offer to Evaluate and Substantiate each aspect of the Claim in Detail! The prospect of spending days sifting through a Detailed Asset Register will usually have the ability to Concentrate Minds, and the Settlement Offer will be improved. Conditions are important to assess here, as although the Settlement Offer might well have been improved, any payments could be Conditional upon Purchase – In short, YOU could be Capitalising for Replacement Equipment, and then recovering the cost later, under their Payment Terms. However and still, there might well be Compromises being forced upon the Insured. The Insurer and/or Loss Adjuster might well present their own ‘Estimate’ for a Replacement Computer Server – Not the DELL mentioned in the Asset Register, but a ‘Frankenstein’ Machine assembled from Chinese Components and assembled locally with no Guarantees or Warranties. It could also be without OS Network Software, or at the very least be supplied with an Unsupported Pirate Copy. Your Asset Register will have already defined the Replacement Cost (with software) at USD 5,400 AND the Asset Register could well have formed part of the Policy Contract. BLOG 01-02 January 2020
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Therefore, an Offer of USD 800 hardly seems worth considering! For Key Equipment such as Computers etc., it might prove worthwhile holding either a Separate and Dedicated Policy or under a Dedicated Lease; where equipment will be replaced by the Lessor. But, be prepared to take ‘Knocks’ for the failing of others. The Insurer might have concluded that your locality is subject to Severe Voltage Drops, and it was this that caused your equipment to fail! First of all, I would be asking ‘Show Me the Evidence’ A valid mitigation would be that you have an Effective Mains Filtering System, and that ALL of your IT Equipment runs from a UPS Unit that guarantees a Uniform Voltage. In this instance the Insured would be within the realms of ‘Reasonability’ as he has no control over the supply being delivered by the Electricity Company, Yet had taken all Reasonable Steps to mitigate the problem. The whole essence of the Insurance Process is that it is the Insurer who takes the Risk and NOT the Insured! AND The ‘Victim’ of a Disaster, does not become an object of ‘Blame!’
TAX INSPECTIONS In some instances Prior Notice is required, together with disclosure as to the ‘Reason’ for the visit. In other territories, No Notice is necessary, and ALL Records and Documentation have to be made available to the Inspection Team – Consequently, Fines and Penalties can be levied for ‘Unpreparedness’ and a ‘Failure to Keep Adequate Records.’ Often it is acceptable to nominate your Accountant as the Point of Contact for Internal Revenue Organisations. In my own case this is the responsibility of the Practice Manager. He also ‘Supervises’ their visit.
It should also be noted that ‘Best Practice Recommendations’ for keeping records of 3 to 5 Years can be somewhat deficient when Tax Authorities are entitled to delve back 9 Years and beyond! As an Architect I NEVER destroy work, or shred documents – There might also be requirements of your Professional Indemnity Policy that require ALL Practice Documentation to be kept for a substantial period of time. Break this rule, and your PI Insurer will drop you like a stone! – QED any Claim will be invalid! – And, he gets to keep the Premiums that you have paid!
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The Asset Register will be fundamental in terms of Asset Depreciation and Accounting. Behind the scenes, Tax Authorities make comparisons between ‘Similar’ organisations. Any ‘Assumptions’ on your part, will have to be ‘Defended’ – The Revenue Authority does not have to ‘Prove’ otherwise! – This really is a case of being ‘Guilty Until Proved Innocent!’ Therefore, Substantive Records, Bills of Sale, Invoices and Photographs of ‘Assets in Use’ will be essential. A Tax Inspection on the part of the Revenue Service will be an inconvenience, at the very least. They might be attending for only a few minutes OR they can be there for days! For my part, my Practice Manager dedicates himself FULL TIME to such visits, with the Inspection Team being given a Single Dedicated Office! He is also cautious of information being requested by the Investigation Team. Standard Forms have been generated for this purpose, rather like RFIs. They require details of Specific Information to be disclosed of what is required for Inspection. This counters any argument that details were either Unavailable, Lost or Withheld! Copies are then given to the Investigation Team. The Copies might also be Redacted should they contain Commercially Sensitive (Client Name) Information. You might be wondering why he does this? – He once worked for the Bureau of Internal Revenue, and is fully aware of all of their ‘Procedures!’
COURT ENFORCEMENT A Judgment for Civil Debt, when enforced, can have dire consequences for any business. In many instances this can entitle Court Enforcement Officers to levy ‘Distraint’ upon Property owned by the Debtor. Until a Judgment is ‘Satisfied’ ALL Property at the Debtor’s Property will be ‘Presumed’ to be his, and can fall under the Control of the Court, via a Writ of Control.
Particularly for the Small Practice, there needs to be a clear definition between Personal and Practice Property. It might well be the case that the Debtor has to ‘Prove Ownership’ – It is not the job of the Enforcement Officer or Court Bailiff to determine otherwise.
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There can also be genuine instances of ‘Erroneous Enforcement.’ For instance, Debts incurred by a previous Tenant or Occupier of your premises could still be enforceable. Also, there could be ‘Undisclosed Debt’ where a business has been taken over. Particularly in the UK avoiding the debts of previous tenants can become something of a ‘Post Code Lottery.’ This can and will affect your Credit Rating. It will also give rise to ‘Uncertainties’ during the course of Due Diligence Exercises, by Potential Clients unless addressed from the outset.
Are you Addressed correctly? A Postal Code in the UK usually identifies 12 to 15 Letterboxes. For example, ‘B69 6QL’ firstly identifies ‘B’ as being for Birmingham; ‘69’ is the Postal District, Suburb or Sector Number; ‘6’ is the Sub-District, and ‘QL’ will identify a Cluster of Properties. Therefore, up to 15 Properties in the same street will possess the same Postal Code. Codes can be entered in to a Google Search, and the select Maps. Unfortunately, UK Credit Reference Agencies, Banks, and Insurers use Postal Codes as part of their Actuarial Analysis of Credit Worthiness. QED one property with a large number of Registered Judgments for Debt, will affect ALL Properties within that Cluster. The same applies to Multi-Tenanted Properties. There is some merit in applying to Royal Mail for a ‘Unique Postal Code.’ The ‘Group Letterbox Code’ above, might apply to an entire building with 10 Tenanted Offices. The Post Office might then Issue B69 6QZ or another available Code for a specific tenant within that building. Alternatively, a PO Box Number might be another alternative. Typically, a UK PO Box Address would read as below; The Postal Code of B69 1AA will relate to the Postal Sorting Office that handles Mail for that Address. Note that this does not apply to all Territories, where PO Box Numbers are the norm. Viz., Transom & Mullion Architects PO BOX 71816 BIRMINGHAM B69 1AA It is worthy to note here, that some care is needed with Addresses and the ‘Level of Disclosure’ – Particularly when related to Court Enforcement. This also enters the Territory of Statutory Registrations. Court Enforcement requires that the name of the Debtor/Debtor Company is as that Registered, and that the Physical Address is correct – It has to be both Word and Letter Perfect! A Sole Practitioner might well be using a Home Office – A dedicated space within the Family Home. If not a Limited Company, the address will usually be the Home Address of the Practitioner. Court Enforcement treats a Residential Property differently to Commercial Premises. Enforcement Officers and Bailiffs have no Right of Entry to a Family Home – Unless through an Open Door or by Invitation.
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However, should the Business use Separated Premises (A Converted Detached Garage), then the situation is somewhat different. Dependent upon the circumstances the Enforcement Officers might well have a ‘Right of Entry.’ For a Limited Company, Address Disclosure becomes more onerous. When Registered, the Company will need to disclose a Registered Office. This must be a Physical Address (Not a PO Box). It relates to the Physical Service (By Hand) of all Official and Statutory Documentation. However, many Limited Companies use the Address of their Accountant as the Registered Office. The Company Letter-Heading will then carry the Trading/Mail Address of the Company within the Heading, and the Registered Office will be in Small Print. Be aware that most Accountants will charge a Fee for this Service, as there is a level of risk on their part. REGISTERED OFFICE Transom & Mullion Limited Chatham House 145 Ealing Broadway LONDON SW1A 2DX
TRADING ADDRESS Transom & Mullion Limited Suite 101 Gateway House High Street Erdington BIRMINGHAM B10 2VX
On the Company Annual Return and when Directors are appointed, a Service Address is required. This again should be a Physical Address. Usually it is the Registered Office, or Accountant’s Address. Any Changes in the Registered Office, and Directors’ Service Addresses have to be notified to Companies House, as and when they happen. The Companies House Database is comprehensive and is Free to use. However, the information submitted is UNVERIFIED – Requiring a further level of Due Diligence. Should Enforcement Action take place, the onus will be upon YOU to Prove Ownership of Property – Otherwise it will be the case that your entire Practice Effects can become the Property of the Court! In such instances, there will be a limited period (Measured in Hours and Minutes) in order to demonstrate title to the contrary, in the unlikely event that Goods are to be removed for Auction. High Court Enforcement Officers in the UK are also entitled to carry out their own Due Diligence on Commercial Premises. This will invariably involve a thorough inspection of Financial Records. Often, this is to determine the Bona Fides of the Company where Enforcement is taking place, and also to detect ‘Subsidiaries’ and other premises that are in the company’s control. The Court Enforcement Process will also highlight the Cruel Reality of Asset Value. Therefore, your Asset Register should demonstrate the following Minimal Information. Procedures will vary according to Territory and Prevailing Jurisdiction in terms of Due Process and Civil Enforcement. There can also be situations where Civil Law and Criminal Law overlap, especially when related to Enforcement.Viz.,
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BOBZBLOGZ 1. 2. 3. 4. 5. 6. 7. 8.
ASSET REGISTERS
Purchase Price (With Receipts, Invoices and/or Bills of Sale) Improvements & Upgrades (With Receipts and/or Bills of Sale) Software (With Receipts and/or Bills of Sale) Salvage Value (Value at the end of the Depreciation Period) Depreciated Current Asset Book Value (Evidenced by Calculation) Insured Value Cost of Replacement (With Justification) Distress Valuation (Discussed above)
In some instances a Purchase made under Finance or Hire Purchase may NOT entitle an Asset to be sequestered by a Court. Once again, much is dependent upon Territorial Rules, and determinations made by Enforcement Officers. A ‘Distress Valuation’ is NOT the same as a Salvage or Depreciated Valuation. For example, a relatively new Laptop Computer might have a Book Value of £500. However, if sequestered and Sold at Auction, it would be unlikely to achieve more than £25 If Damaged or Unserviceable expect no more than a ‘Scrap Value’ of £5 Commonly these are Auctioned in Bulk Lots of 10 or 20. In addition the Court and Enforcement Officers levy Statutory Fees and Interest – There could be a substantial debt still owing after Liquidation of the Assets at Auction. That is far from being the end of the story! – And, the Enforcement Team will be back for a Second Bite!
PURCHASE SALE & TRANSFER OF ASSETS Assets will be purchased from time-to-time, and will become part of the Business. Dependent upon ‘Asset Type’ these will be subject to ‘Annual Depreciation’ with respect to the Financial Accounts of the Business. For instance Computer Equipment could well depreciate at 20% Per Annum. However and commonly, Computer Equipment will be Upgraded during its lifetime. At the end of its usefulness it will be either Sold, Traded, Scrapped or ‘Gifted.’ Here, it is important to recognise that certain Practice Assets will require to be ‘Documented Separately,’ and in much greater detail (Particularly Vehicles and IT Equipment). Dependent upon Territory and Jurisdiction, Accounting Rules vary according to Rates of Depreciation AND the Method of Calculation (Straight Line Depreciation, Double Declining Depreciation and Sum of Years Depreciation). Your Accountant will be best to advise in terms of the Option to be followed. Motor Vehicles can be regarded as being a category of their own – This again is governed by Territory and Jurisdiction, especially where considered as ‘Real Property.’ However, in the case of Practice Principals and Company Vehicles there should be Clear and Unequivocal Evidence, as to WHO SPECIFICALLY is the ‘Owner’ of the Vehicle. A Vehicle under Finance might well be subject to a ‘Personal Chattel Mortgage,’ Loan or Finance Agreement. Technically, it will NOT be within the ownership of the Business – However, it could well have ‘Asset Value’ for that Business, based upon a Residual Lease Value.
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For vehicles NOT Subject to Finance, a Government Registration Document might NOT be ‘Proof of Ownership.’ Generally, a Garage/Dealer Invoice or ‘Bill of Sale’ will be required in order to demonstrate Title. This is particularly so in the case of Civil Enforcement for Debt in the UK. In the UK the DVLA Form V5 (Registration Document) refers to the ‘Vehicle Keeper.’ Essentially, this is the Person who has the responsibility for the ‘Administration’ of the Vehicle. The V5 Form also states in Bold Red Type that it is NOT Proof of Ownership! – Enforcement Officers rarely accept the V5 as a Proof of Ownership, as it can take several weeks in order to register a new Vehicle Keeper – A Bill of Sale is generated at the time of Purchase/Transfer and will predominate. Vehicles will also need to be documented separately, in terms of their ‘Book Value’ (Related to the Business), and their ‘Real Value.’ Here, it should be noted that the Business Accounts might record 20% Annual ‘Book’ Depreciation on a Vehicle – Yet in ‘Real Terms’ Depreciation for Year One (New Vehicle) could be as high as 40% Again, the advice of your Accountant is essential. Assets can also be ‘Transferred’ from one entity to another. Property, Vehicles or other Substantial Assets could also be introduced as ‘Equity’ by a Partner/Principal/Director in the Business. Again, a ‘Bill of Sale’ will be required in order to demonstrate ‘Ownership.’ In the UK, Enforcement Officers will also need to see evidence of Payment in the form of a Bank Transfer, BACS Payment or Paid Cheque – Yet this is far from simple, unless documented correctly. Here, advice from your Accountant and possibly Lawyer, will be required. This is especially so, where a Partner/Principal/Director ‘Retains Ownership’ of Real Property, and charges Rent or Fees for its use by the Practice/Company, whether directly or indirectly. In my own instance (As an Alien/Foreigner) I am Prohibited from Owning Property in The Philippines – Essentially, I cannot own Land or Freehold Property. However, I can hold a Commercial Lease of up to 25 Years. QED our Premises are Owned Outright (Free Simple and Absolute) by our Local Partner, and in turn Leased Back to the Business. This of course benefits the Practice as Rent Payments become ‘Notional’ in terms of Accounting (If that is the way in which the Philippines Government wishes to operate, then who am I to complain?) In instances such as this, advice might well be needed from your Accountant regarding the formation of a ‘Services’ subsidiary. Real Property might also be ‘Improved’ – However, a clear line has to be drawn between what can be regarded as Maintenance & Upkeep, and Genuine Improvement. In basic terms, an ‘Improvement’ could be the Physical Extension of a Property, enhancing its Value. Again, ‘The Asset’ will require a detailed level of documentation, which will undoubtedly involve your Accountant, Lawyer, and an Independent Valuer.
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The need for Clarity and Transparency As we all know, no two businesses are the same, and often Historic Events can become overlooked and ignored, as time proceeds. However, it is often worthwhile revisiting some of these from time-to-time. For example, when a Partnership is formed or a Company Incorporated, there will be either a Partnership Agreement or Articles of Association. These we can regard as the ‘Headline Documents.’ However, they will certainly rely upon other information – Possibly an Inventory of what exists within the premises. There may be others relating to the Assets and Equipment being introduced to the Business by Partners and Directors. Partners and Directors can either ‘Gift’ Assets as a gesture of goodwill. Or they might ‘Lend’ them to a Business for a period of time, whist still retaining Ownership. At the time of Formation or Incorporation there will need to be Deeds of Gift, Loan or Transfer. None of these will involve any exchange of money, yet they can be considerable in terms of their Asset Value. As discussed above, Enforcement Officers in particular will be seeking Documentary Evidence that ‘Money had Changed Hands’ – As in the case of Motor Vehicles. However, in such instances this might not be possible. Therefore, a Short Inventory will need to be added to a Deed of Gift, etc. The Deed will then require to be Attested by a Notary Public or a Commissioner of Oaths, dependent upon Territory. It then becomes clear as to where ‘Ownership’ of those Assets lies. It is important that such arrangements are kept under review. High Court Enforcement Officers have quite wide ‘Presumptive Powers.’ For instance, it would be ‘Reasonable’ for an Enforcement Officer to consider that the Entire Contents of an Office belonged to the Business – Hence, why YOU have to prove otherwise. However, the reality might be that the Furniture and Fittings are part of the Building Rental, Tenancy or Lease. Computer Equipment could be on Finance or Lease Arrangement. Obviously, if this were the case, such equipment would need to be identified as such. Although this might seem to be overly pedantic, it is in fact the norm in terms of the Aviation Industry, and others. Although an aeroplane might be emblazoned with the livery of a National Carrier, its Engines might well have plates welded to them that declare “Property of XYZABC Leasing Inc!”
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THE ASSET REGISTER There are many Software Applications available for preparing an Asset Register. Some Accounting Packages can also provide specific Modules for that purpose, that integrate in to the Accounting System. However here, I have tried to keep things as simple as possible. In terms of ‘Asset Categories’ the following will be the Broad Headings, Viz., 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
Buildings & Real Property Building Systems (Alarms, Air Conditioning, Computer Networking) Vehicles Computer Equipment Computer Software Site-Based Equipment & Survey Instruments Books, Reference Material & Other Documentation Business Documentation & Archives Consumables Fitted Furniture & Equipment Loose Furniture & Equipment
A simple Spreadsheet can be used, referenced to Asset Tags, where appropriate. Whilst Computer Equipment, Desks and Furniture will carry Tags, Practicality and Common Sense will dictate that Tags are not required for every Cup, Saucer and Spoon! – Asset Entries will be reliant upon their Description, such as “6 No. Porcelain Cups and Saucers,” as these are essentially Low Value Items, that are EXPECTED to be replaced over time. A similar situation occurs with Consumables. The tagging and recording of each and every Pencil would be overly pedantic. However, Information relating to Average Stock and Reordering etc., from Invoices and Purchase Orders, would be more than reliable information. Columns on the Spreadsheet, will then record the following information. Note that for High Value items such as Computer Equipment there is a separate Asset File. This will itemise Individual Components inside the machine, such a Disk Drives and Motherboard, etc. It will also contain details of when such items were Replaced, Upgraded or Repaired – Again these should be Cross Referenced to Receipts and Bills of Sale, etc., or a copy held on that file. The Photographic Reference Files should depict the Server In-Situ in Working Order. The Asset File will undoubtedly carry more detailed information. By adding Look-Up and Sort Functions ALL information can be contained on a Single Spreadsheet.
Separate Detailed Files As already mentioned, High Value Assets such as Motor Vehicles and IT Equipment will need their own files of supporting information. The same will apply to any Fire or Safety related equipment too. This is particularly relevant where Claims are being made following a fire. An Insurer could be attempting to pursue ‘Negligence’ in order to mitigate a Claim.
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BOBZBLOGZ COLUMN HEADING Asset Number (Corresponding to a Tag): Item: Item Description: Colour: Asset Classification: Asset File: Location: Space: Acquisition Date: Warranty Expires: Condition: Acquired From: Acquisition Cost: Replacement Cost: Current Book Value: Remarks: Brand: Model: Serial Number: Photographic Reference:
ASSET REGISTERS DETAILS 1145882 Computer Server Full Tower Black COMP-HW COMPHW-DL01 Studio Hub Room 12 May 2012 12 May 2012 Good RJM (Bill of Sale 12 May 2012) PHP 50,000 PHP 72,500 PHP 5,000 Includes Server OS Software DELL S-2000 Server 509-8-344553-Q-LR 1145882.JPG
How to do it The task can appear to be quite daunting – Recording everything down to the ‘Last Tea Spoon.’ However, just keep in mind of the consequences of NOT preparing the Asset Register. For the New Start Practice, preparation will be relatively easy – A House Rule should be to record every new purchase or introduction as it comes through the door! One of the simplest methods will be to use Sticky Inventory Labels, and a Log Book. Photographs should also be taken of larger and more substantial items. Proprietary Labelling (available inexpensively), also lends an ‘Air of Credibility’ should snap inspections occur – If the ownership of a few Labelled Items can be demonstrated, it is unlikely that every asset will be queried. However, should the Tax Inspector or Enforcement Officer be more pedantic, then all of the records are there for examination.
Above is an example of ‘Off the Shelf’ Inventory Tags. ‘Spoiled’ Tags MUST always be recorded in an Error File. BLOG 01-02 January 2020
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Computer Equipment Insurance Companies, Tax Authorities and Court Enforcement see this in terms of ‘Black and White!’ However, there are many shades of ‘Grey’ in between. For instance, let us take the case of ‘Transom and Mullion’ a Small Practice of 5 Staff. They have 5 Computers for Architectural Staff, 1 for a Principal and 1 for an Office Manager. They all communicate via a Central Server. The Hardware is on average around 5 Years old, but well maintained, and has been upgraded as and when necessary. Now, let us assume that the Office suffers Fire or Flood Damage, and the whole installation will need to be replaced. With 5 year old equipment its Book Value will be minimal. However, replacement could run into thousands! – Insurance Companies will attempt to mitigate their Loss by suggesting Second-Hand or Unbranded Equipment, unless there is a distinct ‘New for Old’ Clause in the Policy. Transom and Mullion run Windows 7 on its PCs, and the Prime Software is AutoCAD 2010. Both versions are now obsolete and unsupported. Here the use of these versions has been dictated by Clients, and the Sub-Consultants that the Practice uses, rather than any reluctance to upgrade. Replacement will require NEW more advanced Hardware, together with Windows 10 and AutoCAD 2020. The Server will also need to be upgraded too! The ‘New’ Hardware and Software will require Expert Installation. Therefore, the Disaster Preparedness Plan should have taken this in to account, in terms of Cost, Time and Programme.
Disaster Preparedness This is often overlooked by the Small Practitioner. Quite unbelievably it is also dismissed by much larger organisations. A separate document covers this in more detail. However, much here will be down to ‘Assessing Risks’ relating to Fire, Flood, Health and Natural Disasters, etc. Together with how Quickly and Efficiently the business can be up and running, following such an event. The Process of Preparation is both Progressive and Cumulative. It will deal with Minor Risks such as a Hard Drive Failure on a single PC, through to a Complete System Crash. It will also deal with Physical Disasters such as Fire, Flood, Typhoons and Earth Tremors, etc. Not forgetting Health Risks, such as Notifiable Diseases – What would be your plan should a member of staff be diagnosed with Tuberculosis?
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