Day: April 4, 2008

Fixed Asset Management

Fixed Asset Management

Fixed asset management is an accounting process that seeks to track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence. This applies to all industries because doing so makes the workplace more productive.

Without fixed asset management, the equipment and resources of the company are not used both effectively and efficiently. Think of it like a car. If you do not have the oil changed, it will break down. The net effect is being able to save money instead of spending it on repairs which could have been avoided in the first place.

This is why companies take various steps to manage these closely. For instance, machines that are used undergo regular maintenance. If anything needs to be replaced or replenished, this is ordered well in advance so there will not be any disruptions at the workplace.

If the machines are already obsolete and there are newer models that can do a better job, management must consider the costs of buying new or maintaining the old one. In recent times, new equipment is purchased to avoid being left behind the competitors.

Management also has to coordinate with the various departments in the company to see how each one is doing. This is done on a monthly basis to determine whether the company is achieving growth. If it is not, find out why and then do something about it.

For large companies that need to ship goods nationwide, management has to check on their logistical support. Will it be cheaper to maintain their own set of trucks or should they outsource this to someone else?

If the company is experiencing some hard times because of a few subsidiary companies that are not pulling their weight, management has to decide whether to sell subsidiaries or find a way to improve them. Should there be an opportunity to gain something, then they also have to consider if this will be beneficial to their portfolio. Will such a sale put them at a competitive disadvantage? What capability will they lose through such a sale?

Companies also let their auditing teams conduct an inventory to take into account their fixed assets. Sometimes, they may need outside help to do it and there are a number of established companies that have the manpower to do exactly that. They can even suggest to management improvements that need to be done and may well be worth the expense of hiring seasoned professionals.

In order for management to see how well the company is doing, the asset management data has to be put on paper. These days, this means computerizing everything so everyone in management will be able to give their input and agree to a suitable plan.

Fixed asset management is what every company needs to survive in the 21st century. This will serve as a guide whenever money has to be used to buy things or whether the funds of a certain project have to be diverted elsewhere.

Before any decision is made, they have to ask themselves a series of questions. For instance, will this be good for the business long term? How much can we make? How much do we stand to lose? Is this the latest technology around? Is this the best thing in the market today?

These are just some of the questions that companies have to ask themselves in order to practice effective fixed asset management.

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DVD Review: Planet Earth – The Complete BBC Series

Planet Earth – The Complete BBC Series
DVD ~ David Attenborough
Price: $54.99

5.0 out of 5 stars
Totally wonderful, one of a kind. The BBC edition is terrific.

I first saw the series on the TV in the USA, and was so stunned by the photography, that I instantly wanted to own the DVDs. Even my parents stopped talking and sat there staring with their mouths open, it was so gorgeous.

So, once I had decide to by the DVD, I went to Amazon, read the reviews, and was thrilled when I found out that the BBC had its own edition, with world-famous British naturalist David Attenborough’s as the commentator, rather than Sigourney Weaver for the American Tv edition.

Well the difference is like night and day. I love Attenborough’s excellent, engaging commentary, his enthusiasm and passion for his subject, compared to Weaver’s flat monotone.

I know Attenborough can seem to get a bit carried away, but there is nothing like an expert who really knows what he is talking about versus someone reading from a script Or even worse, trying to make jokes about what she sees, and totally misses the point of what is happening on screen. Some of the comements were crass, tasteless, and diffeintely not educational.

The BBC edition is a real keeper, but if you any reason you can’t find it, get the DVD no matter what. This will be a great gift for children so they can have a record of animals and habitats that might not be around for much longer!

The DVDs are a real visual feast, totally fascinating. The shows are organized by habit, to help us understand the kinds of creatures that can live in each.

The footage of the Himalayas and the snow leopards is the only film of its kind in the world and was totally incredible.

The birds in Papua New Guinea performing their ritual mating dances is a show stopper. I wanted to show one of my friends that one segment. He not only played it back 10 times, he insisted on watching the whole episode even though he had to run to work!

The ocean episode is totally fascinating, and I believe are the deepest photos ever taken, using a robotic submersible. It makes you realize that man has gone to the moon, but still doesn’t know much about the things living on the sea floor. The vampire octopus really has to be seen to be believed.

This is one of those landmark TV programs from the BBC that anyone will be hard put to surpass. Own a bit of history, and get it now before global warming renders our polar bears and other arctic creatures extinct.

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A Probate Glossary

There are many confusing terms and commonly used phrases that are related to the probate process and estate planning in general. Here are some definitions to help the layperson understand the sometimes complex process of probate.

AB Trust- This is a trust designed to take advantage of the personal estate tax exemption. It also allows the surviving spouse use of the assets, no matter what, for the remainder of his or her life.

Administrator- This person is appointed by the court to manage and oversee the court process for the estate of a deceased person or “decedent” who has died without leaving a will.

Attorney-in-Fact- This person is designated to act as an agent for the executor of the will.

Basic Will- The basic will is designed to give everything to the spouse, if living, or the children who are 18 or above.

Beneficiary- The beneficiary is the person who receives property or other assets from a will, insurance policy, or contract.

Durable Power of Attorney for Health Care- This is a written document that gives someone the power to make medical decisions for another person in case that person becomes incapacitated in some way.

Durable Power of Attorney for Property- This is a written document that gives someone the power to make property and financial related decisions for a person who has become incapacitated in some way.

Estate- The property and assets of an individual, including all real estate, bank accounts, life insurance policies, stocks and bonds and personal property.

Executor- The person or persons named in the will who will manage the estate of the decedent. He or she will inventory all properties, pay of debts and taxes, then distribute any remaining assets to the beneficiaries and heirs.

Fiduciary- The trustee who is identified in a trust, or an institution or person who is legally responsible for the distribution, management, or investment of funds.

Grantor- The person who gives assets to another, usually by way of a trust.

Inter Vivos Trust- A trust created while a person is still living that holds property in trust for the benefit of someone.

Intestate- When someone dies without a will.

Joint Tenancy with Right of Survivorship- This term refers to co-owning property. When one owner dies, the other owner is legally entitled to take possession of the property, no matter what the will says.

Living Trust- This is a trust that is established during a person’s lifetime that is used to place property. Because the basic living trust does not effectively use the personal estate tax exemption if the estate is large, then it is often recommended for married couple to set up AB Trusts.

Living Will- The document that outlines a person’s wished in regards to life-sustaining treatment should he or she become terminally ill or in a vegetative state.

Marital Deduction- A deduction set up by the government that allows one spouse to leave his or her estate directly to his or her spouse upon death without having to pay gift or estate taxes.

Pour-Over Will- Everything is distributed into a trust by this type of will.

Power of Appointment- A “general” power of appointment gives a person the unlimited power to distribute a decedent’s property. A “limited” power of appointment gives restrictions to the person on who may receive the property.

Probate- The process in court of reviewing, legitimizing, and processing claims against a will, or in the case of no will, settling the estate according to inheritance laws.

QTIP Trust- A trust that is set up that allows a person to leave his or her assets to his or her spouse for their use during their lifetimes, but still be able to control where the assets go upon the spouse’s death.

Trust- A written document that provides for property being held by someone for someone else.

Trustee- The person named in a trust who manages and distributes the property for and to the beneficiary.

Will- A legal document that states how property and assets will be distributed upon a person’s death.

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What is Probate?

The word “probate” is taken from the Latin word, “probere,” which means “to prove.”  Probate is the legal process whereby a will is proven valid or invalid, and the total assets of the deceased person are counted, appraised, and inventoried.

Probate court also makes sure that all taxes and debts against the estate are paid, and then the remaining assets are divided among the heirs and beneficiaries.

If a person has all of his property is his or her name, these are known as his or her “assets.”  Assets include real estate, tangible property, such as jewelry, cars, etc, and intangible property, such as bank accounts, and stocks or bonds.

Most of the time, a person’s spouse and children would inherit his or her assets after he or she dies.  However, first they must prove that they are legal heirs by submitting marriage and birth or adoption records.

Before the heirs can take control of the assets, the assets must be authenticated by the courts.  To accomplish this, the heirs must submit the person’s death certificate and documentation that all of the assets belong to the deceased.

The probate court will then appoint a personal representative to administer the probate case.  He or she will inventory, appraise, and authenticate the assets.

There are special situations that arise that are exceptions to this process.  For example, certain assets belonging to the deceased may not go through the probate court.  For instance, if the deceased appointed someone as beneficiary when opening a bank account, the funds from the bank account would be transfered to the beneficiary into the beneficiary’s account directly upon the bank holder’s death, without going through the probate court.

The process is different if the deceased prepared a document where he or she clearly spelled out how much and too whom the assets should be given.  The deceased may have named a personal representative, but if he or she did not, the court would then appoint and “executor” and a guardian for any children involved who may need help managing any assets.

This document is called a “will” and should have been notarized and signed by two or more witnesses.  If a person dies after writing a valid will, then he or she is considered to have died “testate,” which means “to make a will.”  The person writing the will is known as the “testator.”  Conversely, if someone dies without leaving a will, then he or she is known to have died “intestate,” and the beneficiaries would have to be determined appropriately.

Because the law requires that the heirs or beneficiaries prove the validity of the will, the will has to go through the probate court process.  Only then will the probate court begin the process of paying any outstanding debts and taxes against the estate, and then divide the remaining assets to the heirs and beneficiaries, according to the directions of the will.

The court issues a formal order to transfer the property directly to the heirs and beneficiaries according to existing inheritance laws.

How long does the probate process take, you might wonder.  The completion of the process depends upon a number of things, such as the size of the estate, worth of the assets, validity of the will, the appointment of the executor or personal representative in case there is no will, and locating and notifying all of the beneficiaries.

If the paperwork is not too complex, then the process will generally take less than a year.

However, if the will is contested or anything untoward happens in the process, probate can take many years to complete.

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