Non-current assets and current assets are able to fully characterize the position of property, business and investment investments of the enterprise.
Common Subsystems for Asset Management in an Enterprise
Today, asset management activities are aimed at a financial management system. It is closely connected with 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 referred to as operational management.
- Innovative activity.
- 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 connected with operational and innovative management. When the annual financial statements are prepared, it is necessary to take care of the calculation and reflection of performance indicators for the use of current and non-current assets. The finished analysis is recorded exclusively in the explanatory note, where accountants can assess the trends and reasons for the effective or irrational use of assets.
Asset Management Principles
The following assets can be distinguished, which are based on such principles:
- Communication with various directions in the field of financial management. Direct management of enterprise systems.
- Formation of a managerial decision that is comprehensive. Non-current assets and current assets are used to provide direct or comprehensive impact on the result of financial activities.
- Development and implementation of the system according to important criteria that provide opportunities for matching a specific management decision. At the same time, they involve the general financial policy of enterprises.
- Focus on the creation of successful strategic goals for the further development of the organization.
The basic concept and varieties of enterprise assets
Assets - a common set of all kinds of property rights that belong to the enterprise. As their means are fixed assets, stocks, financial contributions, monetary claims that are presented 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 property of the organization.
Assets can be divided into tangible and intangible. In turn, the former may include assets that do not have a cash equivalent. They are able to satisfy the following conditions:
- Identification of property.
- Application for the production of specific products, the performance of important work or for the provision of services.
- Economic and organizational benefits.
Intangible assets relate to the goodwill of an enterprise and intellectual property.
Non-current asset management
Non-current assets of the organization include important assets, 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 constant management. It can be carried out in various forms and in numerous functional units.
Some tasks for 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
We can distinguish the following classification of non-current assets:
- Fixed assets of the enterprise. These include structures, cars, vehicles, buildings and plantings 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, carrying out construction, modernization, as well as major repairs.
- Intangible assets. These include enterprise software products, copyright, trademarks and patents.
- Long-term financial investments . This includes a variety of investments, securities, stocks, as well as registered capital.
Thanks to this classification, the company can use accounting accounts. Non-current assets are determined using the main cycle of the value of the circular turnover.
Features of current assets management
Current assets include components such as semi-finished products, a variety of materials, raw materials and money. The main current assets are short-term financial investments, manufactured products, as well as funds that are in the accounts. You can highlight the generally accepted classification of these funds:
- According to the materials. This includes used objects of labor and raw materials, which serve as the basis for the manufacture of products.
- A manufactured product is an item for further reference. It is manufactured directly at the enterprise and is intended for further implementation.
- Cash and investments. This group can include cash and cashless payments.
Analysis of the composition of the current asset in the enterprise
The main and most important element for the analysis is the composition of current assets. This is the most mobile part of any available capital, the further financial condition of the whole enterprise depends on the current state of which. If the composition and structure of the current asset are in a stable state, then this factor indicates stability. That is, the company has a well-established process of production and further sale of products.
When significant changes in the composition and structure are noted in organizations, we can talk about the unstable work of the organization. Such indicators as the composition and size of working capital at the enterprise relate not only to needs during production, but also to the need for their further circulation. To carry out successful business activities, it is necessary to think about working capital. To perform calculations of financial needs in the field of working capital, you can apply the following well-known methods:
- Analytical.
- Coefficient.
- Direct account.
The generally accepted structure of current assets in the enterprise
The structure of current assets is the ratio between the amount of funds, which is constantly in circulation, and the main elements. Such indicators are influenced by the specifics of the implementation of a particular production process, supply and close cooperation with buyers and customers. To study the structure of current assets, you need to take care of forecasting changes in the future composition of working capital.
We can distinguish the principles on which the structure of working capital depends:
- 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 goods, as well as products into cash.
- Accounting for possible risk levels from capital investments.
To perform an analysis of such a structure, it is necessary to determine the specific gravity of all the 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 property situation at the enterprise.