Part of the responsibility of an Executive Committee is to draw up an asset register. Over time many of the Strata assets will age and require repair or replacement. If they are not assessed and maintenance programs introduced unforeseen and wasted costs will arise. The level of detail required will be determined by the future plans for the individual assets taking into account:
- Age and condition of each asset
- Expected lifetime of the asset
- Recommended maintenance schedules
- Optimum usage of the asset
- Funds available in the Sinking Fund
- Planned future capital expenditure
The most important benefit of an asset register is to provide a clear picture of all equipment that will deteriorate over time and to enable a budget to be prepared that will protect these assets. Steps can be taken well in advance to ensure that all stakeholders are aware that equipment needs to be serviced and eventually replaced. Funds can be allocated and if necessary special levies approved to extend the life and performance of key assets.
The simplest form of asset register is the depreciation schedule which lists categories of assets that will be replaced over time. Several accepted methods of calculating depreciation may be used, including fixed percentage, straight line, and declining balance methods. Depreciation expense generally begins when the asset is commissioned. This ensures that anticipated lifetime costs and eventual replacement can be budgeted for. Individual asset register: An individual asset register identifies specific assets and defines a thorough costing of both servicing and replacement costs over the life of the asset.
Detailed asset register:
A detailed asset register is the most comprehensive and not only budgets for planned maintenance and unexpected repairs but also tracks the history of each asset. This results in the most cost effective use and protection of each piece of equipment and generates additional savings over the lifetime of the asset.
A productive and protective strategy is to consider an equipment monitoring solution. This enables an Executive Committee to specify particular assets such as air conditioning plant, power usage and lighting and install sensors to monitor the performance of these assets. Any movements outside of agreed tolerances will result in notification and significantly improves both servicing and replacement costs over the life of the assets.