Capital Asset Management

Does Outsourcing have potential Sarbanes-Oxley implications?  Actually we have yet to come across a case where Outsourcing does not have impact on Capital Asset Management and S-O! 

Outsourcing almost always “impairs” some type of asset.
  • Plant
  • Equipment
  • Land
  • Know How
  • IP
  • Goodwill

Under Sarbanes-Oxley potential and actual impairments need to be accounted for.  Phoenix Strategies Syndicate will help you to understand these impacts and build them into your project economics.  What is impairment?  How do you account for impairment?  How can you possibly build it into project economics?   We can assist you with all of these questions and help you implement or strengthen your existing Capital Asset Management system.

Capital Asset Management is a critical component of EVA®, SVA or any of the “Shareholder Value Added” derivates of STERN STEWART & CO.'s approach developed 30 years ago and broadly adopted by many companies and consulting firms.

EVA® =NOPAT-(Capital in all forms)  [the cost of capital]

The big 4 firms offer emulated systems such as: “TVA”, “SVA” & others. CAM is an important element of an EVA® governance or management system and as you will see is a critical element to S-O as well.

The government defines CAM as follows:

Capital Asset Management is a business strategy that seeks to maximize the [net] functional and financial value of capital assets [land, structures, equipment and intellectual property] through well thought-out acquisitions, allocations, operations and dispositions.

Private for-profit, not-for-profit and public entities are paying increasing attention to the relationship between capital assets and organizational performance.

A corporate culture that values asset management:

  • links its asset decisions closely to its strategic goals
  • has an elevated awareness of its assets
  • employs performance management techniques to monitor asset performance on a regular basis.

The objectives of asset management-based decision-making are to achieve greater return on investment, market value, and program performance at lesser cost [and liability].”

Further readings: