Capital Assets are assets that are used to facilitate value delivery and operations of an organization. Their useful lives are long term and include industrial, commercial and residential buildings, operational infrastructure (telecoms, power, water etc, specialized equipment etc.).
A healthy capital assets management culture is essential to the overall profitability of the organization as well as the health, safety, and quality of life of users and customers.
Budgetary pressures often impede the proper management of capital assets especially expenditures for improvement and renewal programmes in government establishments that do not prepare multi-year capital plans or fully consider the impact of capital projects on their operating budget.
This lack of investment makes it increasingly difficult to sustain assets in conditions required to provide optimal service levels. Deferring essential maintenance or asset replacement will ultimately compromise the organization’s ability to provide services and threaten public health, safety and overall quality of life.
In addition, deferring maintenance and/or replacement will reduce the asset’s utility value and increase long-term costs and liabilities to be borne by the organization.
Government entities should therefore establish capital planning, budgeting and reporting practices to encourage adequate capital spending levels. A government’s financial and multi-year capital plan should address the continuing investments necessary to properly maintain, dispose of and renew its capital assets in line with strategic objectives.
Strategic Intent LLP – (Capital Projects and Asset Management Consulting) provides training and implementation support in all aspects of project management as described below:
