Asset Management Terms: A-to-Z

Asset Management Terms: A-to-ZFor more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset Management Terms: A-to-ZKeeping track of your organizations assets is critical to its daily operations and longterm success. Managing assets properly can result in cost and time savings, among awealth of other benefits. As an asset manager, you’ve probably come across sometechnical jargon you thought was only relevant to accountants, warehouse managers,or software technicians.Whether your organization is using athird party asset management solutionor tracking assets in-house, there aresome organizations, acronyms andtechnical terms that should be on yourradar. We’ve got you covered on thevocabulary you need to know—fromAcquisition costs to Zombie assets. Let’sget started.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

AAcquisition cost The cost ofan asset before applying salestax, but after accounting fordiscounts and incentives.Active asset An asset useddaily, or for routine businessoperations.Amortization A method usedto prorate an intangible asset’scost over the duration of itsuseful life.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset Any company resourcepurchased for long-term use thatrequires close tracking, with avalue that can be measured andexpressed in dollars.Asset accounting Theprocess of managing andsupervising fixed assetsthrough accurate financialrecording and reporting.Asset category (asset group)Fixed assets fall into sevendifferent categories: (1) land,easements and right of ways,(2) land improvements, (3)construction (buildings), (4)construction in progress, (5)infrastructure, (6) machineryand equipment, and (7)licensed vehicles.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset class A grouping of assets that share similar characteristics. These classescarry information including useful life, salvage value, account code, category,replacement information, capitalization threshold, depreciation method, anddepreciation convention.Asset data Information used toidentify an asset, includinglocation, status, and physicalcharacteristics.Asset lifecycle The stages anasset will undergo throughoutits useful life, includingacquisition, service life, anddisposal.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset management A system that manages and maintains anorganization’s assets throughout their lifecycle. Examples ofpopular systems include spreadsheets and software solutions.Asset management software Anapplication used for the purpose ofrecording and tracking an assetthroughout its lifecycle. In addition, itcan provide tools for financialreporting, and often offers the ability tointegrate with other softwareapplications like Microsoft Excel.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset tag Labels with an adhesive backing that are used to track a physical asset’slocation.Asset tracking The process oftracking physical assets, whichmay include scanningtechnologies and assettagging.Auditor A person or firmresponsible for performing anofficial examination of anorganization’s financialaccounts.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

BBalance sheet The financial statementwhich summarizes a company’s assets,liabilities and shareholder’s equity.Barcode technology An asset trackingmethod that utilizes adhesive barcodestickers, each unique and consisting of agroup of patterned bars, spaces and/ornumbers that, when scanned, are used toidentify the item that has been tagged.Bookkeeper A person responsible forkeeping record of an organization’sfinancial activities.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

CCapital asset Fixed assets that have the ability to purchase new property for acompany.Capital improvement Additions or adjustments to property that boost its value,increase useful life, or modify its use.Capitalization threshold The minimumcost at which an asset must be reflectedin your accounting records. Thisthreshold may be determined bygovernment regulation, or by thestandards set forth by your organization.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Capitalized asset An asset with a total cost that is expensed over future periods,rather than being expensed completely at the time of procurement orinstallation.Cloud computing A type ofinternet-based computing inwhich information is stored andused through the internet,rather than saved on a harddrive. Although similar tovendor-hosted software, thetwo are not the same.Current asset Cash or cashequivalents that can beconverted into cash within oneyear.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

DDepreciation A method of allocating a portion of the cost of anasset over the period it can be used. While there are manytypes of depreciation, the most commonly used is the straightline method.7-08-04 1625.pngFor more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Digital asset An intangibleasset that is stored in digitalform.Disposal Process of selling anasset that has reached the endof its useful life.EExceptions report A list of discrepancies, or assets not located in the re-inventoryprocess, which is generated by an asset management solution.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

FFinancial Accounting Foundation (FAF) Theorganization responsible for the managementand financing of the Financial AccountingStandards Board (FASB) and the GovernmentalAccounting Standards Board (GASB).Financial Accounting Standards Board (FASB)The board charged with setting and overseeingstandards for public and private companies, aswell as not-for-profit organizations.Fixed asset A tangible asset purchased for the intention oflong-term use, and that is not consumed or sold during thecourse of business. Fixed assets cannot be quickly convertedinto cash, and include land, buildings, and equipment.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

GGenerally Accepted AccountingPrinciples (GAAP) Mandatory principles,standards, and procedures used bycompanies for financial reporting.Ghost asset A fixed asset that appears onyour financial statement, but is no longerin use because it is missing or has beendetermined unusable.Governmental Accounting Standards Board (GASB) The board charged with settingand overseeing standards for state and local governments.Click here to view our Quick Guide on GASB Statement 34.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

IInactive asset An asset not currently used in business operations.Income statement A financialstatement detailing acompany’s revenues andexpenses for the purpose ofreporting financialperformance over the span ofthe accounting period.Installed solution A solution inwhich data storage servers arelocated on-site, or in a datawarehouse.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Intangible asset An asset that has no physical presence and cannot be touched.Examples include trademarks and computer software.Integration In regard to software, the capability of an asset management solution tosuccessfully combine with another application, such as Excel or QuickBooks, toenhance the efficiency and convenience of the asset tracking process.Inventory Items purchased for short-termuse, and which do not require close tracking.There are different methods used toperform an inventory, including wall-to-wall,inventory by exception, and inventory byrandom sample.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

MMobile solution An asset managementsolution supported by the use of scanningtechnology.NNational Property Management Association (NPMA) An association dedicated toproviding support and resources to property managers.Non-current asset (long-term asset) An asset that is unlikely to be turned into cashwithin 1 year. Examples include long-term investments and property, plant, andequipment.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

PProperty manager A professional who is responsible for effective, efficientmanagement of assets, including company equipment and materials.QQR code A type of barcode thatis used to identify an item andstore information. The code iscomprised of black squareswhich are arranged in a grid.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

RRadio Frequency Identification (RFID) technology Technology used to identify objectsby utilizing data-encoded RFID tags, which are then captured by a reader throughradio waves. Unlike barcode technology, RFID can be used to identify objects that areout of vision. For a more detailed look at RFID technology, check out our Quick Guide.Reconciliation The process ofcomparing asset information in yourrecords with the current status of theassets and correcting mistakes ordeficiencies in order to keep assetrecords up to date.Residual value (salvage value) Theexpected remaining value of an assetonce it’s reached the end of its usefullife.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

SScanning technology Used in conjunction with barcode or RFID tags, scannerssimplify the asset tracking process and maximize efficiency.Sensitive asset An asset that has potential to be impacted by external factors. Asensitive asset can fall into one of the following categories: interest-sensitive or theftsensitive.Software as a Service (SaaS) An internet-basedSoftware distribution model in which anOrganization subscribes to and accesses anapplication through the internet.Spreadsheet Created using applications likeMicrosoft’s Excel or Google Drive, companies oftenuse spreadsheets to track assets as an alternativeto asset management software. Though a cheaperoption, there are many flaws and risks associatedwith using spreadsheets to manage assets.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

TTangible asset An asset with a physicalpresence that can be touched.UUseful life (service life) An estimate of the duration of time thatan asset is forecasted to be in service for the reason it waspurchased.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

VVendor-hosted software Software that is installed and accessed from a remote serverby a third-party vendor.ZZombie asset A capitalized fixed asset that is still in use, but not reflected in accountrecords.For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Looking for a term that you didn’t find here? Let us assetworks27For more information visit www.assetworks.comCopyright 2017 AssetWorks Inc. All Rights Reserved.

Asset management A system that manages and maintains an organization’s assets throughout their lifecycle. Examples of popular systems include spreadsheets and software solutions. Asset management software An application used for the purpose of recording and tracking an asset throughout its lifecycle. In addition, it can provide tools for financial reporting, and often offers the ability to .