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Creating and maintaining a physical asset register

Asset registers allow agencies to keep track of the value and condition of current assets, allowing for better budgeting and more information on the potential risks involved.

Physical asset registers vs fixed asset registers

A physical asset register (PAR) provides granular details about an organisation's assets, including:

  • how critical they are to operations
  • their current condition
  • likely repair and maintenance costs.

Most organisations have a fixed asset register (FAR), which is a financial tool for capitalisation of assets to be held on the books until they are depreciated. FAR information is usually high level, with assets bundled into types – for example, a fit-out on a floor could be broken down between furniture, equipment, and office improvement classification but provide no individual asset information.

Putting together an asset register

There are a few key steps involved in creating and maintaining an asset register for your agency:

1. Define your assets

Before prioritising and assessing the assets, come to an agreement with key stakeholders on how to determine which assets should be included on the register.

As a starting point, define assets by function or type, then break into asset classes followed by components. You may also choose to break assets down by location, condition and quantity, and add detail like warranty, supplier and replacement value to inform future replacement plans.

The register should include the following information:

  • facility or site
  • asset class or service
  • asset type
  • asset component
  • location
  • quantities
  • condition

Agencies with more complex asset holdings will need to include more detail, and potentially use custom software for their PAR.

2. Prioritise your assets

Once you've defined the assets you own, do a risk analysis to understand what the impact to the agency would be if an asset failed. This helps you to identify the agency's most critical assets, closely manage and monitor critical assets, focus your resources on these assets to ensure they remain fit for purpose, and mitigate any risks associated with asset failure.

There are different ways to decide what makes an asset more or less critical. One way is to consider how failure would impact:

  • staff – how many people would be impacted if the asset failed
  • business operations – could the agency continue operating without using the asset
  • agency objectives – could you still meet key objectives if the asset could not be used?

For a more in depth assessment, you should use an internal risk management framework to consider things like:

  • operational and financial risks
  • reputation and legal risks
  • likelihood of the event
  • consequences of the event
  • level of risk acceptance.

Rank the assets

Once the analysis is done, assets are given a score between 1 (for not critical) and 5 (for very critical). These represent – running from the lowest to highest score – insignificant, minor, moderate, major and catastrophic asset failures.

3. Assess their condition

Once you've defined and prioritised your assets, you can do a condition assessment to inform if or when they will need to be refurbished, renewed or replaced.

If you're able to, assess all of the assets on your register; otherwise, just focus on the most critical ones. Where you have a large quantity of the same asset, like desks or chairs, you can assess a representative sample rather than assessing every single item.

Assessments can involve a visual inspection or a more intrusive inspection. They should take into account cost of ownership to date, including things like previous repairs.

If more than one person is assessing items, agree in advance what different ratings mean for specific assets to ensure consistency. Below is a general overview of conditions and what they may be interpreted as:

  • Rank 1: Very good condition; asset is like new
  • Rank 2: Good condition; asset has minor defects only
  • Rank 3: Fair or moderate condition; normal wear and tear visible on asset, occasional faults and reactive repairs needed
  • Rank 4: Poor condition; asset has many faults and service interruptions, reactive costs are beginning to escalate
  • Rank 5: Very poor condition; asset continually faulting and can no longer consistently provide the service or benefit, has reached obsolescence, is no longer fit for purpose or economical to maintain/operate, is unsafe or inoperable
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