F IX ED A S S ET S A N D

TANGIB L E A S S ET S
BRIEF OVERVIEW OF THE IMPORTANCE OF
ASSET MANAGEMENT IN ACCOUNTING

ASSET MANAGEMENT PLAYS A CRUCIAL ROLE IN ACCOUNTING AND FINANCIAL REPORTING FOR
BUSINESSES. BY MAINTAINING ACCURATE RECORDS, COMPLYING WITH REGULATIONS, SUPPORTING
DECISION-MAKING, AND OPTIMIZING RESOURCE UTILIZATION, BUSINESSES CAN ENHANCE THEIR
CREDIBILITY, PROFITABILITY, AND LONG-TERM SUCCESS IN THE COMPETITIVE MARKET ENVIRONMENT.
HERE ARE SOME KEY POINTS
HIGHLIGHTING ITS SIGNIFICANCE:
FINANCIAL REPORTING ACCURACY
PROPER ASSET MANAGEMENT ENSURES THAT ASSETS ARE RECORDED ACCURATELY IN FINANCIAL STATEMENTS,
PROVIDING A TRUE AND FAIR VIEW OF THE COMPANY'S FINANCIAL POSITION.
COMPLIANCE WITH ACCOUNTING STANDARDS
EFFECTIVE ASSET MANAGEMENT HELPS BUSINESSES ADHERE TO ACCOUNTING STANDARDS AND REGULATIONS,
ENSURING TRANSPARENCY AND RELIABILITY IN FINANCIAL REPORTING.
DECISION-MAKING SUPPORT
ASSET MANAGEMENT PROVIDES VITAL INFORMATION FOR DECISION-MAKING PROCESSES, SUCH AS ASSET
ACQUISITIONS, DISPOSALS, AND MAINTENANCE, AIDING IN STRATEGIC PLANNING AND RESOURCE ALLOCATION.
ASSET UTILIZATION AND OPTIMIZATION
EFFICIENT ASSET MANAGEMENT ENABLES BUSINESSES TO MAXIMIZE THE UTILIZATION OF THEIR ASSETS,
REDUCING IDLE RESOURCES AND ENHANCING OPERATIONAL EFFICIENCY.
RISK MANAGEMENT
PROPER ASSET MANAGEMENT HELPS IN IDENTIFYING AND MITIGATING RISKS RELATED TO ASSET
DEPRECIATION, IMPAIRMENT, AND LOSS, SAFEGUARDING THE COMPANY’S FINANCIAL HEALTH.
BUSINESS VALUATION
ACCURATE ASSET MANAGEMENT CONTRIBUTES TO THE VALUATION OF THE BUSINESS, IMPACTING INVESTOR
PERCEPTIONS, LENDING DECISIONS, AND OVERALL ENTERPRISE VALUE.
TAX COMPLIANCE
ASSET MANAGEMENT ENSURES PROPER DOCUMENTATION AND VALUATION OF ASSETS, FACILITATING TAX
COMPLIANCE AND MINIMIZING THE RISK OF REGULATORY ISSUES.
LONG-TERM SUSTAINABILITY
EFFECTIVE ASSET MANAGEMENT PRACTICES CONTRIBUTE TO THE LONG-TERM SUSTAINABILITY OF THE
BUSINESS BY OPTIMIZING ASSET PERFORMANCE, REDUCING COSTS, AND SUPPORTING GROWTH
INITIATIVES.
DEFINITION OF FIXED ASSETS AND
TANGIBLE ASSETS
FIXED ASSETS
FIXED ASSETS ARE LONG-TERM TANGIBLE ASSETS THAT ARE USED IN THE PRODUCTION OF GOODS OR SERVICES, FOR
RENTAL TO OTHERS, OR FOR ADMINISTRATIVE PURPOSES. THESE ASSETS ARE NOT MEANT FOR SALE IN THE NORMAL
COURSE OF BUSINESS AND ARE EXPECTED TO PROVIDE ECONOMIC BENEFITS TO THE COMPANY FOR MORE THAN ONE
ACCOUNTING PERIOD.

EXAMPLES OF FIXED ASSETS INCLUDE:

PROPERTY: LAND, BUILDINGS

PLANT: MACHINERY, EQUIPMENT

EQUIPMENT: VEHICLES, COMPUTERS
TANGIBLE ASSETS
TANGIBLE ASSETS ARE ASSETS THAT HAVE A PHYSICAL FORM AND CAN BE TOUCHED OR FELT. THESE ASSETS ARE CONSIDERED TO HAVE A
MONETARY VALUE AND CONTRIBUTE TO THE COMPANY’S NET WORTH. TANGIBLE ASSETS CAN INCLUDE BOTH FIXED ASSETS AND CURRENT
ASSETS, PROVIDING LONG-TERM BENEFITS TO THE BUSINESS.

EXAMPLES OF TANGIBLE ASSETS INCLUDE:

MACHINERY

VEHICLES

BUILDINGS

LAND
EQUIPMENT
FIXED ASSETS AND TANGIBLE ASSETS CONTRIBUTE TO THE
GROWTH AND SUSTAINABILITY OF A STARTUP OR SMALL
BUSINESS.
FIXED ASSETS AND TANGIBLE ASSETS PLAY A CRUCIAL ROLE IN THE GROWTH AND SUSTAINABILITY OF A
STARTUP OR SMALL BUSINESS. HERE ARE SOME WAYS IN WHICH THESE ASSETS CONTRIBUTE TO THE
SUCCESS OF A BUSINESS:
ENHANCED OPERATIONAL EFFICIENCY:
FIXED ASSETS SUCH AS MACHINERY, EQUIPMENT, AND VEHICLES ENABLE STARTUPS TO STREAMLINE THEIR
OPERATIONS AND INCREASE PRODUCTIVITY.
TANGIBLE ASSETS LIKE OFFICE SPACE AND INFRASTRUCTURE PROVIDE A CONDUCIVE ENVIRONMENT FOR
EMPLOYEES TO WORK EFFICIENTLY AND EFFECTIVELY.
CAPACITY FOR GROWTH:
INVESTING IN FIXED ASSETS ALLOWS STARTUPS TO SCALE THEIR PRODUCTION CAPACITY TO MEET
GROWING DEMAND FOR THEIR PRODUCTS OR SERVICES.
TANGIBLE ASSETS PROVIDE A PHYSICAL FOUNDATION FOR BUSINESS EXPANSION, SUCH AS ADDITIONAL
OFFICE SPACE OR RETAIL LOCATIONS.
IMPROVED QUALITY AND CONSISTENCY:
UTILIZING FIXED ASSETS LIKE SPECIALIZED MACHINERY OR TECHNOLOGY CAN ENHANCE THE QUALITY AND
CONSISTENCY OF PRODUCTS OR SERVICES OFFERED BY THE BUSINESS.

TANGIBLE ASSETS, SUCH AS STORE FIXTURES OR MANUFACTURING FACILITIES, HELP MAINTAIN A

CONSISTENT BRAND IMAGE AND CUSTOMER EXPERIENCE.
ASSET VALUE AND COLLATERAL FOR FINANCING
FIXED ASSETS AND TANGIBLE ASSETS CAN SERVE AS COLLATERAL FOR SECURING FINANCING OR LOANS TO
SUPPORT BUSINESS GROWTH AND EXPANSION.

THE VALUE OF THESE ASSETS STRENGTHENS THE BUSINESS’S FINANCIAL POSITION AND
CREDITWORTHINESS, MAKING IT EASIER TO ACCESS CAPITAL FOR INVESTMENT.
LONG-TERM COST SAVINGS
OWNING FIXED ASSETS CAN LEAD TO LONG-TERM COST SAVINGS COMPARED TO RENTING OR LEASING
EQUIPMENT OR FACILITIES OVER TIME.

PROPER MAINTENANCE AND UPKEEP OF TANGIBLE ASSETS CAN EXTEND THEIR USEFUL LIFE, REDUCING THE
NEED FOR FREQUENT REPLACEMENTS AND SAVING ON OPERATING EXPENSES.
ASSET APPRECIATION AND VALUE CREATION
FIXED ASSETS, SUCH AS REAL ESTATE OR INTELLECTUAL PROPERTY, HAVE THE POTENTIAL TO APPRECIATE IN
VALUE OVER TIME, CONTRIBUTING TO THE BUSINESS’S OVERALL ASSET BASE.

TANGIBLE ASSETS THAT ARE WELL-MAINTAINED AND UPGRADED CAN INCREASE IN VALUE AND CONTRIBUTE
TO THE BUSINESS’S VALUE PROPOSITION AND COMPETITIVENESS IN THE MARKET.
COMPETITIVE ADVANTAGE AND MARKET
DIFFERENTIATION
STRATEGIC INVESTMENT IN FIXED ASSETS AND TANGIBLE ASSETS CAN GIVE STARTUPS A COMPETITIVE
EDGE BY OFFERING UNIQUE CAPABILITIES OR SUPERIOR INFRASTRUCTURE COMPARED TO COMPETITORS.

WELL-MANAGED TANGIBLE ASSETS CAN DIFFERENTIATE THE BUSINESS IN THE MARKET AND ATTRACT
CUSTOMERS SEEKING QUALITY AND RELIABILITY.
EXAMPLES OF FIXED ASSETS AND TANGIBLE ASSETS IN
ENTREPRENEURSHIP
FIXED ASSETS:

BUILDINGS: SUCH AS OFFICE SPACES, FACTORIES, OR WAREHOUSES.

MACHINERY AND EQUIPMENT: PRODUCTION EQUIPMENT, VEHICLES, OR SPECIALIZED TOOLS.

FURNITURE AND FIXTURES: DESKS, CHAIRS, SHELVES, AND OTHER FURNISHINGS USED IN THE BUSINESS.

LAND: REAL ESTATE OWNED BY THE BUSINESS FOR OPERATIONAL PURPOSES.

COMPUTER SYSTEMS: SERVERS, WORKSTATIONS, AND NETWORKING EQUIPMENT.

TANGIBLE ASSETS:

INVENTORY: RAW MATERIALS, WORK-IN-PROGRESS, AND FINISHED GOODS HELD FOR SALE.

CASH: PHYSICAL CURRENCY, COINS, AND CASH EQUIVALENTS KEPT ON HAND OR IN BANK ACCOUNTS.

VEHICLES: TRUCKS, VANS, OR CARS USED FOR TRANSPORTATION OR DELIVERY.

SUPPLIES: OFFICE SUPPLIES, CLEANING MATERIALS, OR OTHER CONSUMABLES USED IN DAY-TO-DAY

OPERATIONS.
MACHINERY: EQUIPMENT USED IN MANUFACTURING PROCESSES, SUCH AS MANUFACTURING TOOLS OR
ASSEMBLY LINES.
ACQUISITION AND MANAGEMENT OF
FIXED ASSETS AND TANGIBLE ASSETS:
ACQUISITION
RESEARCH AND PLANNING: IDENTIFY THE NEED FOR THE ASSET BASED ON BUSINESS REQUIREMENTS AND FUTURE
PROJECTIONS.

BUDGETING: ALLOCATE FUNDS FOR THE ACQUISITION, CONSIDERING COSTS LIKE PURCHASE PRICE, INSTALLATION, AND
MAINTENANCE.

VENDOR SELECTION: CHOOSE RELIABLE SUPPLIERS OR VENDORS BASED ON FACTORS LIKE QUALITY, PRICE, AND AFTER-
SALES SUPPORT.

NEGOTIATION: NEGOTIATE TERMS AND PRICES TO ENSURE THE BEST DEAL FOR THE BUSINESS.
DUE DILIGENCE: CONDUCT INSPECTIONS AND ASSESSMENTS TO VERIFY THE CONDITION AND SUITABILITY OF THE ASSET.
MANAGEMENT
MAINTENANCE: IMPLEMENT REGULAR MAINTENANCE SCHEDULES TO ENSURE ASSETS REMAIN OPERATIONAL AND EFFICIENT.

DEPRECIATION MANAGEMENT: TRACK AND ACCOUNT FOR DEPRECIATION OVER THE ASSET’S USEFUL LIFE TO REFLECT ITS
DECREASING VALUE ACCURATELY.

UTILIZATION MONITORING: MONITOR THE USAGE OF ASSETS TO OPTIMIZE EFFICIENCY AND IDENTIFY UNDERUTILIZED
RESOURCES.

UPGRADE AND REPLACEMENT: PLAN FOR UPGRADES OR REPLACEMENTS WHEN ASSETS BECOME OBSOLETE OR INEFFICIENT TO
MAINTAIN COMPETITIVENESS.
INSURANCE: PROTECT ASSETS THROUGH INSURANCE COVERAGE AGAINST RISKS LIKE THEFT, DAMAGE, OR NATURAL DISASTERS.
FINANCIAL IMPLICATIONS OF FIXED ASSETS AND
TANGIBLE ASSETS:
INITIAL INVESTMENT
ACQUIRING FIXED ASSETS AND TANGIBLE ASSETS REQUIRES A SIGNIFICANT INITIAL INVESTMENT, WHICH
AFFECTS CASH FLOW AND LIQUIDITY. THIS INVESTMENT CAN BE SUBSTANTIAL, ESPECIALLY FOR LARGE-
SCALE ASSETS LIKE BUILDINGS, MACHINERY, OR VEHICLES.
DEPRECIATION

FIXED ASSETS AND TANGIBLE ASSETS UNDERGO DEPRECIATION, WHICH IS THE GRADUAL REDUCTION IN
THEIR VALUE OVER TIME DUE TO WEAR AND TEAR, OBSOLESCENCE, OR AGING. DEPRECIATION IMPACTS THE
COMPANY’S FINANCIAL STATEMENTS BY REDUCING ITS REPORTED PROFITS AND TAXABLE INCOME.
CAPITAL EXPENDITURE

INVESTMENTS IN FIXED ASSETS AND TANGIBLE ASSETS ARE CONSIDERED CAPITAL EXPENDITURES AND
TYPICALLY INVOLVE LONG-TERM COMMITMENTS OF FINANCIAL RESOURCES. MANAGING CAPITAL
EXPENDITURE IS CRUCIAL FOR MAINTAINING FINANCIAL STABILITY AND SUSTAINABILITY.
FINANCING

BUSINESSES MAY FINANCE THE ACQUISITION OF FIXED ASSETS AND TANGIBLE ASSETS THROUGH VARIOUS
METHODS, INCLUDING CASH RESERVES, LOANS, LEASES, OR EQUITY FINANCING. THE CHOICE OF FINANCING
OPTION AFFECTS THE COMPANY’S DEBT LEVELS, INTEREST EXPENSES, AND FINANCIAL FLEXIBILITY.
RETURN ON INVESTMENT (ROI)

THE PERFORMANCE OF FIXED ASSETS AND TANGIBLE ASSETS IS EVALUATED BASED ON THEIR ROI, WHICH
MEASURES THE EFFICIENCY AND PROFITABILITY OF THE INVESTMENT. MAXIMIZING ROI REQUIRES
OPTIMIZING ASSET UTILIZATION, MINIMIZING MAINTENANCE COSTS, AND MAXIMIZING REVENUE
GENERATION.
ASSET VALUATION

FIXED ASSETS AND TANGIBLE ASSETS ARE RECORDED ON THE COMPANY’S BALANCE SHEET AT THEIR
HISTORICAL COST LESS ACCUMULATED DEPRECIATION. PROPER VALUATION OF THESE ASSETS IS
ESSENTIAL FOR ACCURATELY REFLECTING THE COMPANY’S FINANCIAL.
RISK MANAGEMENT

FIXED ASSETS AND TANGIBLE ASSETS EXPOSE THE COMPANY TO VARIOUS RISKS, SUCH AS TECHNOLOGICAL
OBSOLESCENCE, MARKET CHANGES, OR PHYSICAL DAMAGE. IMPLEMENTING RISK MANAGEMENT
STRATEGIES, SUCH AS INSURANCE COVERAGE OR CONTINGENCY PLANS, HELPS MITIGATE THESE RISKS AND
PROTECT THE COMPANY’S FINANCIAL INTERESTS.
CONCLUSION

FIXED ASSETS AND TANGIBLE ASSETS ARE CRUCIAL COMPONENTS OF A BUSINESS’S ASSET BASE AND PLAY
A FUNDAMENTAL ROLE IN ITS FINANCIAL HEALTH AND OPERATIONAL EFFICIENCY.

UNDERSTANDING THE DIFFERENCES BETWEEN FIXED AND TANGIBLE ASSETS IS ESSENTIAL FOR EFFECTIVE
ASSET MANAGEMENT AND FINANCIAL REPORTING.
THE END
GROUP
ALEJO JUNNEL
ALIJAR ORLANDO
BOREJON HARLENE
AQUINO JOLINA
SALAS JONABEL
LUNAS MARCELYN
LAFORGA JANE CARLA