Question

1. Explain why do organisations have policies regarding the use of assets? Why do staff need to be aware of them? What is a fixed asset register (FAR), why is it maintained, and what does it enable you to do?

2. Juniper Ltd purchased machinery on 01.01.2010 at the cost of $10000. Juniper depreciates the equipment @ 25% p.a. on the reducing balance method. Calculate the accumulated depreciation balance and depreciation charge for year ending 30.06.2012.

Answer 1

Assets in an organization are primarily used for the generation of economic resource to the business. Organization have asset usage policies to make the users of asset i.e. the employees, workers, management etc aware of the asset use to the company and its benefits to the company thereon. These policies also act as a survillience to check the use of assets on personal basis by the users for their personal benefits.

The staff needs to be aware of these policies so that they dont end up using the assets for their personal reasons or beyong the assets capacity and end up in facing penalties and punishments for the same.

Fixed Asset Register i.e. FAR is a register mainatained to record the list of all the assets owned and maintained by the organisation. The reason to maintain it is to have a record of assets at the time of verification of assets and to have a detailed record of the book values, carrying amounts and depreciation related to the assets.It enables us to locate a particular asset or to know the specifications related to a particular asset.

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