Accounting Of Fixed Assets Research Articles

Fixed Asset Accounting Software Evaluation: A Structured Methodology For The Mid-Market Firm

Packaged software evaluation represents a major decision for business. It involves a number of quantitative as well as qualitative attributes in choosing among system alternatives. This paper illustrates an evaluation methodology for accounting software selection, specifically a fixed asset system. The methodology incorporates three stages: 1) software screening; 2) detail package evaluation; and, 3) confirmation and design (also known as a test drive). Initially, developing a short list through screening of accounting software determines whether an appropriate package exists and narrows the field of available fixed asset products for detailed consideration. The second stage determines which of the remaining fixed asset systems (the finalists) best meets the needs of the organization, from both functional and technical perspectives. The final stage, or phase, compares user requirements with the features of the selected fixed asset software by determining how these requirements will be satisfied by specific applications built using the fixed asset software. The methodology also controls for the possibility that no fixed asset software product is suitable and that such a system must be constructed on a custom basis. No other reported evaluation and selection approach offers this device. A case example demonstrating the applicability of the suggested methodology is given for a mid-sized hospital organization representing the largest market segment for accounting software.

The development of fixed asset accounting in South African gold mining companies: confronting the issues of prudence, matching, periodicity and capital maintenance

The ‘Appropriation Method’ of accounting applied by South African gold mining companies is fundamentally different from mine accounting elsewhere and results in reported earnings and asset values that are not comparable with those of mining companies in other countries. This paper traces the development of the Method, in an historical context, in an attempt to understand why, and how, it emerged and became established. Particular attention is paid to 19th century writings of local accountants, ‘transactions’ of professional bodies, and to the special characteristics of the South African gold mining industry. Transitional processes are illustrated by reference to the published accounts of the Crown Reef Gold Mining Company. The persistence of the Appropriation Method is a reminder that while assumptions of uniform accounting periods, matching, business continuity and the need for capital maintenance underpin most conventional accounting, nevertheless useful accountings can exist without these assumptions.

Management Aspiration and Audit Opinion: Fixed Asset Accounting at the Staveley Coal & Iron Company 1863–1883

Abstract In discussing the form and content of published financial statements prior to 1900, J. R. Edwards argues that, in a laissez-faire environment, management is free to choose those accounting principles and practices providing maximum utility, given the goals of the organisation. This paper examines the approach to the problem of choice, in the area of fixed asset accounting and reporting, adopted by the board of directors of the Staveley Coal & Iron Company Limited during the 20-year period following its incorporation in 1863. The paper concludes that substantial freedom of action was available to the directors in this respect in spite of the retention of a prestigious and highly qualified external auditor, plus the engagement, from time to time, of an expert engineering consultant.

THE MEASUREMENT OF CAPITAL THROUGH A FIXED ASSET ACCOUNTING SIMULATION MODEL (FAASM)

In this article the author describes a method of estimating the capital stock of the corporate sector which is being developed at Statistics Canada. The method uses a “Fixed Asset Accounting Simulation Model” or FAASM. FAASM provides estimates of the capital stock by inferring the actual service lives of fixed assets, and using these with price indexes to revalue assets on a constant price basis. FAASM is thus an alternative to the widely used Perpetual Inventory Method. By also inferring accounting lives using the depreciation accounts, it has other important outputs. These latter get only passing mention here. Since FAASM exploits the available data in a comprehensive, systematic way, its service life and capital stock estimates may eventually, after system development and improvement in operation, approach the limits of attainable accuracy.

Fixed Asset Accounting in the Shipping Industry: P&O 1840–1914

The Peninsular & Oriental Steam Navigation Company (P&O) was one of the most important British shipping companies in the nineteenth and twentieth centuries. The extensive P&O archives reveal the evolution of the company's methods of accounting for its fleet of merchant ships, from an initial arbitrary depreciation reserve fund, through relatively systematic application of the reducing balance method, to a rigid adherence to straight line depreciation. P&O saw depreciation largely as a source of internally generated funds for asset replacement, and secondarily as a means of dividend smoothing. The latter objective was also achieved through the use of a secret reserve. P&O's accounting methods were rarely innovative, but taken together they epitomize the ‘best’ accounting practices of their day.

NEW PRODUCTS

Financial Management Following our article on fixed asset accounting (OCT) we give details here of two further financial accounting services which have just been introduced.

FIXED ASSET ACCOUNTING CAN BE FLEXIBLE

As from this year all but the smallest companies are required to include lists of fixed assets in their current cost accounting. Whatever method used, the recording and processing of fixed assets registers is a complex matter in which the accountant is almost inevitably dependent upon the computer. Laura Tatham, who has been writing about computer‐related subjects for many years, has been delving into the subject and here describes two of the software packages which are available for fixed asset accounting.

AN ANALYSIS OF FIXED ASSET ACCOUNTING AND ITS EFFECT UPON PROFIT DETERMINATION DURING PERIODS OF PRICE CHANGE*

AN ANALYSIS OF FIXED ASSET ACCOUNTING AND ITS EFFECT UPON PROFIT DETERMINATION DURING PERIODS OF PRICE CHANGE*

An Analysis of Fixed Asset Accounting and its Effect Upon Profit Determination During Periods of Price Change

An Analysis of Fixed Asset Accounting and its Effect Upon Profit Determination During Periods of Price Change