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Best Practices for Fixed Assets Management March 11, 2010 Best Practices for Managing Fixed Assets for Financial Firms Rashid Nur BNA Software March 11, 2010


  1. Best Practices for Fixed Assets Management March 11, 2010 Best Practices for Managing Fixed Assets for Financial Firms Rashid Nur BNA Software March 11, 2010 ����������������������������������������������������� �������������� ���������� !"� Today’s Presenter • Sr. Product Manager – Fixed Assets • Responsible for BNA Software’s Fixed Assets Suite • 15+ years experience in Fixed Asset Management • 17+ years commercial software experience Rashid Nur BNA Software O: 703-341-3623 E:rnur@bna.com ����������������������������������������������������� �������������� ���������� !"�

  2. Best Practices for Fixed Assets Management March 11, 2010 Agenda – Best Practices • Document Fixed Assets Management Policy • Improve Efficiency – Completing Fixed Assets Work • More Efficiency • Ensure Accuracy – Compliance / Getting the Numbers Right • Strong Internal Controls – Preventative and Detective • Asset Inventory – Reconciling Physical Assets with Financials • Case Study - Financial Industry Firm ����������������������������������������������������� �������������� ���������� !"� Fixed Assets Management Policy – Your Roadmap for Success ������� ����������������������������������������������������� �������������� ���������� !"�

  3. Best Practices for Fixed Assets Management March 11, 2010 Document – Fixed Assets Policy Includes: • Threshold – Asets that should (or not) be capitalized • Data – what data must be captured, maintained, and archived • Depreciation -- how to depreciate assets for GAAP and Tax • Asset Inventory – how often to perform and assigning the different levels of priority for assets (high value etc.) • Reporting – what type of reports are required and who needs them (additions, disposals, transfers, reconciliation, audit trail, etc.) ������� ����������������������������������������������������� �������������� ���������� !"� Poll Question #1 • Which of the following items are described in your fixed assets policy document? (Select all that apply.) A. Threshold for assets that should (or not) be capitalized B. Data that must be captured, maintained, and archived C. How to depreciate fixed assets for GAAP and Tax D. How often to do asset inventory / what assets to inventory E. Specific fixed assets reporting requirements F. Do not have a policy BNA Software Confidential - Not For External Distribution 6 ����������������������������������������������������� �������������� ���������� !"�

  4. Best Practices for Fixed Assets Management March 11, 2010 Improve Efficiency • Processing Fixed Assets Transactions – One/or more at the same: Additions/Disposals/Transfers – Capture All required data in one step, i.e. copy and paste • Minimize Data Entry to Complete Transactions – Additions: Asset Type, Cost, Acquisition Date, Description – Disposals: Asset ID, Disposal Date, Proceeds, Type of Sale • Monthly Closing – Reconciliation work, posting journal entries, minimize the # of transactions to reconcile, batch reporting BNA Software Confidential - Not For External Distribution 7 ����������������������������������������������������� �������������� ���������� !"� Improve Efficiency • Automate use and enforcement of depreciation policy (after you have documented depreciation policy) – System should automatically use your policy to depreciate assets • Book: Asset Type, Property type, method, life, convention, rate – Staff inputs basic required data for each book; • type, cost, date, description, other user defined fields etc – Reduce volume of input without sacrificing quality or quantity • input 4 items of data vs. 9 items to complete addition – 55% improvement • Additions [100 Assets x 2 minutes = 200 minutes (x .55 = 110 minutes)] – Reduce potential costly errors / increase reconciliation time BNA Software Confidential - Not For External Distribution 8 ����������������������������������������������������� �������������� ���������� !"�

  5. Best Practices for Fixed Assets Management March 11, 2010 Improve Efficiency • Ability to Report on Required / all periods – Prior, current, and future periods • Batch Reporting / list of reports for period-close – Sorting /grouping data to meet reporting requirements – Selecting required books (GAAP, Tax, State etc) – Summary, Detail, round/decimal, Page break • Separate process to report on data / open backup data file BNA Software Confidential - Not For External Distribution 9 ����������������������������������������������������� �������������� ���������� !"� Improve Efficiency • Ability to Mass Data Change – Transactions – Process multiple additions / disposals, etc. – Modify multiple assets, i.e. cost center changes, etc. • Managing Construction-In-Progress (CIP) Assets – Track budgeted expenses vs. actual expenses – Report on project / contract status – Converting CIP assets into capitalized assets BNA Software Confidential - Not For External Distribution 10 ����������������������������������������������������� �������������� ���������� !"�

  6. Best Practices for Fixed Assets Management March 11, 2010 Poll Question #2 Which of the following tasks is the most time consuming for you / your staff? A. Data Input: additions, disposals, transfers, modifications B. Reconciliation: data changes and reconciliation with GL C. Reporting: period-close activity reports, journal entry report BNA Software Confidential - Not For External Distribution 11 ����������������������������������������������������� �������������� ���������� !"� Ensure Accuracy • Enforce Depreciation Policy for GAAP and Federal Tax regulations in the system (not rely on manual process) • System should use predefined depreciation policy. Users should not manually enter Depreciation Method, Life, Rate, or Convention (it may be too late once you catch mistakes). • If outsourced tax work to CPA Firm, increase quality of data by enforcing tax depreciation policy defined with help of CPA Firm – Assets may or may not qualify for bonus / whether or not you qualify for S179 deduction. Tracking how much S179 deduction or ITC taken or remaining etc BNA Software Confidential - Not For External Distribution 12 ����������������������������������������������������� �������������� ���������� !"�

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