Teachable Moments: Integrating a Capital Improvement Plan with the Asset Capitalization Process

Devendra is a PM Specialist in Winnipeg, Manitoba, Canada.

 

Teachable moments are formed when you have done something--regardless of the outcome--and learned from the experience. Learning makes us better at what we do and provides a great opportunity to develop others and sharpen skills. We’ve compiled our best Teachable Moments from our community members for you to learn from and share with other project managers.

Asset capitalization has a significant impact to a company’s income statement and balance sheet. Hence, the project expenditure should be capitalized soon after it gets completed. Generally this operation is carried out manually and is likely to be delayed, especially where large numbers of projects are executed simultaneously.

In order to overcome this problem, I have been successful in automating the complete process from project initiation to the asset capitalization stage using the Asset Management System.

Once a project gets completed, it is essential to capitalize the expenditure to enhance a company’s profit by reducing the expenses. When money is spent to purchase an asset, it might be gone but the value remains with the company. With the exception of land, every capitalized asset is assumed to have a useful lifespan and expenses are spread over the same period. Therefore, the assets are generating the revenue for the company.

All normal expenses (installation, transportation, …

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