Muh.

Ferial Ferniawan
A031191156
Definition and Objectives of Asset Management
Every private company organization and government certainly has assets, both tangible
and intangible. Every asset owned must be managed effectively and efficiently so that the asset
can provide the highest benefit for the company. The term asset management may be rarely heard
by many people. Others more often hear or say the terms management and assets separately. The
management in question includes 4 (four) basic functions, namely Planning, Organizing,
Leading, and Controlling, while what is meant by assets in general is wealth. Wealth can be in
the form of tangible (physical) or intangible wealth. Tangible assets owned by the company such
as land, buildings, equipment and machinery. Tangible assets that are oriented to public services
such as infrastructure include roads, bridges, ports, and irrigation. While intangible assets, for
example, are intellectual property rights, copyrights, patents and others. Based on the description
above, assets can be articulated as something tangible or intangible that has the potential to
achieve the vision and mission. In another perspective, assets are defined as follows: assets are
anything that has economic value that can be owned by individuals, companies, or owned by the
government that can be assessed financially. Assets or wealth owned by individuals such as
houses, land, vehicles, and so on. Company-owned assets such as office buildings, company
land, equipment and machinery, equipment and other properties. Explicitly, assets from an
economic point of view are goods or anything owned by a person, organization, both private and
government that owns:
1. Economic value
2. Commercial value
3. Exchange rate
Assets can also be interpreted from an accounting point of view, namely wealth which
includes:
1. Current wealth (cash and other current assets)
2. Long-term assets or fixed assets (long-term assets such as real estate, plant, equipment
and supplies)
3. prepaid and deferred assets (expenditures for future costs such as insurance, lease
rights, and interest)
 4. intangible assets such as trademarks, patents, copyrights, and goodwill
Assets are very important for a company. Many companies still consider physical asset
management to be just an asset register management instrument. Reality on the ground shows
that many cases actually started with mismanagement and mismanagement of assets, resulting in
significant losses. For example, resource optimization cannot be carried out optimally because it
is not clearly identified, so it is difficult to know whether a production tool is time to be replaced
or is still feasible for maintenance. The next question if it has to be in maintenance when is the
right time to do this, if it must be replaced whether with the same type of tool or there is another
better alternative. Decisions about choices in asset management can only be answered correctly
if we have clear information about the asset.

ASSET MANAGEMENT CONCEPT

According to Britton, Connellan, Croft (1989) said Asset Management is "difine good
asset management in terms of measuring the value of properties (assets) in monetary terms and
employing the minimum amount of expenditure on its management (see Siregar, 2004:517). .
According to Sugiama (2013: 15) based on physical asset management, asset management is
definitively the science and art to guide wealth management which includes the process of
planning asset requirements, obtaining, taking an inventory, conducting legal audits, assessing,
operating, maintaining, renewing or removing up to transfer assets effectively and efficiently.

These various definitions of asset management say that asset management is a systematic
process that maintains, upgrades, and operates assets in the most cost-effective manner through
the creation, acquisition, operation, maintenance, rehabilitation and disposal of assets associated
with (1) identify what assets are needed, (2) identify funding needs, (3) acquire assets, (4)
provide logistical support and maintenance systems for assets, (5) delete or renew assets so that
they can effectively and efficiently meet objectives. The essence of asset management is that
asset management is concerned with applying technical and financial judgments and good
management practices to decide what assets are needed to meet business objectives, and then to
acquire and maintain assets over the life of those assets until disposal. According to Siregar
(2004:518), in the international world, asset management has developed quite rapidly, but in
Indonesia, this is especially in the context of asset management of regional governments which
are not fully understood by regional managers. Local government asset management can be
divided into five stages of work which include; asset inventory, legal audit, asset valuation,
optimization of utilization and development of SIMA (asset management information system), in
which the five stages are interconnected and integrated with one another.

More clearly this is summarized as follows (Siregar, 2004: 518-520).

1) Asset inventory.
Asset Inventory is an activity that consists of two aspects, namely physical and
juridical/legal inventory. Physical aspects consist of shape, area, location, volume/amount, type,
address and others. Meanwhile, the juridical aspect is the status of control, legal issues that are
owned, the deadline for mastery. The work process carried out is data collection,
codification/labelling, grouping and bookkeeping/administration in accordance with asset
management objectives.

2) Legal audits.
This concerns the legal audit as the scope of work for asset management in the form of an
inventory of asset control status, systems and procedures for asset control or transfer. Next,
identify and find solutions to legal problems, and strategies to solve various legal problems
related to asset control and transfer. Problems that are often faced in legal audits involve weak
control status, assets controlled by other parties, transfer of assets that are not monitored and
others.

3) Asset valuation.
The further work unit of asset management is in the form of asset valuation activities as
an effort to assess assets controlled by the regional government and usually this activity is
carried out by an independent appraisal consultant. The results of this value will be used to
determine the value of wealth and information for pricing the assets to be sold.
 4) Asset optimization.
Furthermore, asset optimization is an activity to optimize the physical potential, location,
value, amount/volume, legal and economic assets owned by these assets. Assets that have
potential can be grouped based on leading sectors that can be the foundation of the national
economic development strategy, both in the short, medium and long term. To determine this, it
must be measurable and transparent, while for assets that cannot be optimized, the causal factors
must be sought, whether legal, physical, low economic value or other factors, so that each asset
will provide its own value. The final result of this stage is recommendations in the form of
targets, strategies and programs to optimize the assets controlled.

5) Supervision and control.

Then as the final activity of asset management, namely supervision and control and this is
often the subject of blasphemy against the current local government. The most effective means to
improve the performance of this aspect is SIMA development. Through SIMA, work
transparency in asset management is guaranteed without the need for worries about supervision
and the week control.
In SIMA, the four aspects above are accommodated in the system by adding aspects of
supervision and control. Thus, every handling of an asset is clearly monitored, starting from the
scope of handling to who is responsible for handling it. This will be expected to minimize KKN
in the implementation of services by the local government.

ASSET MANAGEMENT OBJECTIVES

Asset management objectives can be defined from various dimensions or viewpoints. In

general, the purpose of asset management is to make the right decisions so that the assets
managed to function effectively and efficiently. Effectiveness is the achievement of results in
accordance with the objectives as previously set. Effective asset management means that the
assets managed can achieve the expected goals of the organization concerned, for example
achieving the highest performance in customer service. While effectiveness means the degree of
success that can be achieved based on the goals that have been set. Or effectiveness is a measure
that shows the high and low targets that have been achieved, for example the number of
achievements, degrees of quality, time and others. An achievement can be expressed as a
percentage of the target achieved from the overall target set. If the achievement of the target is
high, it means that the effectiveness is also higher. A series of activities that can realize the goals
correctly means that all of these activities have high effectiveness. In other words, effective is
able to achieve the goals or objectives that have been set.

As for efficient means using the lowest possible resources to get high results (output), or
efficiency is a high ratio between output and input. In asset management, efficiency is inherent in
every stage of asset management, especially efforts to achieve high efficiency in the use of time,
energy and costs. If the asset objectives are stated more specifically than the general objectives,
the more detailed asset management objectives are to be able to:

1. Minimize costs over the life of the asset (to minimize the whole life cost of assets)
2. Can generate maximum profit (maximum profit)
3. Can achieve the optimal use and utilization of assets (optimizing the utilization of
assets)