Fixed Asset Inventory & Reconciliation

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Open up the view of your enterprise

Does your existing fixed asset record accurately reflect the physical reality of the assets upon which your enterprise depends?  Inaccurate records can blindside you and your organization-heightening strategic, financial and operational risk.  In a post-Sarbanes-Oxley environment of corporate (and company officer) accountability, when both GAAP and IFRS expect enhanced transparency-the lack of clarity relative to your fixed assets could cost you more than you would imagine.

The need for accurate data is now being driven by the multiplicity of regulatory changes and related reporting requirements, all of which require moving towards 360° asset visibility.  Enterprises have come to embrace how important it is to know “what they have” and “who to go to for assistance.”  The path to transparency begins with an accurate inventory of your assets.  As simple as that sounds, maintaining a reliable fixed asset inventory is a challenging, labor-intensive task for any enterprise—public or private.

American Appraisal is here for you.  While other consulting firms have downsized their fixed asset capabilities, relying instead on subcontractors and staff members who are more customarily involved in other consulting activities, American Appraisal has continued to develop this area of its expertise.  Each year, we provide fixed asset services for hundreds of Clients including some of our nation’s largest manufacturers, telecommunications leaders, universities, healthcare systems as well as state and local governments.

We invite you to discover the American Appraisal difference.

What would you like to see today?

Public and private sector Clients can have different fixed asset inventory and reporting challenges; however, both rely on accurate information to account for, control and manage their real and personal property assets.

Starting with proven methodology and procedures, our specialists draw upon deep experience and leading edge technology to constantly evolve and refine new and better procedures.  Consequently, American Appraisal is recognized for establishing our profession’s best practices in fixed asset inventory & reconciliation.

I want to see if I’m missing anything obvious.
When was the last time a physical inventory of your fixed assets was conducted?
How often are your fixed asset sub-ledgers assessed for accuracy and completeness?
Are property taxes and insurance premiums being paid on ghost assets?

American Appraisal differs from other firms who approach ‘fixed’ assets with a ‘fixed’ notion of what is appropriate.  We believe that this is precisely how ‘obvious things’ are missed.  Our Consultants draw from an unrivaled knowledge base built over thousands of engagements to select an approach and methodology that will provide the level of detail you require to make the most appropriate management decisions.

As the saying goes “If it isn’t broke, don’t fix it.”  That is why American Appraisal offers diagnostic studies, a low-cost way of finding out if your fixed asset records are adequate.  If a problem exists, we recommend the appropriate path, which can range from a limited study to confirm the continued existence of a small sample of your fixed assets to an exacting wall-to-wall physical inventory and reconciliation of the assets to your fixed asset accounting ledger.  Here are a few things we found for our Clients:

• Millions of dollars in property tax savings for HCA Inc. as a result of physical inventory of fixed assets and identification of unrecorded disposals.
• A detailed analysis of the fixed asset records of a pharmaceutical manufacturer identified a large number of bulked entries.  Our solution provided the appropriate detail for individual entries, which will allow for easy maintenance of future disposals.
• A fixed asset study resolved locational discrepancies that had resulted from years of improper accounting of transfers for an international manufacturer of semi-conductors resulting in over $500K in tax savings.
• Performed a wall-to-wall inventory and reconciliation to segregate over $1.5 billion in assets between a major university and its medical center.  The process also identified that more than 20% of the recorded assets no longer existed.

I want to see numbers that do not raise flags.

The one universal truth about fixed asset accounting records is that over time inaccuracies will accumulate, thereby undermining the reliability of this critical management tool.  Equipment transfers, retirements and disposals; bulk purchases; changes in capitalization thresholds; employee turnover; merger, acquisition and divestiture activity—all can have adverse accounting and financial reporting implications.

You invested a significant amount of time, effort and money in the creation of your fixed asset record. American Appraisal can help you perpetuate that investment through the provision of annual updating services. Here are a few examples of how we set the records straight.

• Reconstruction of the fixed asset accounting records of HealthSouth Corporation to support its multibillion dollar restatement for financial reporting.
• Physical inventory and reconciliation of over $3 billion in fixed assets comprising buildings, infrastructure and equipment of the City of Atlanta including Hartsfield International Airport.
• Due to resource limitations, a multinational telecommunications equipment manufacturer with over 50,000 assets worth over $1 billion retains American Appraisal on a cyclical basis to help maintain the accuracy of their fixed asset accounting records for Sarbanes-Oxley compliance.
• A major research university saw their federal reimbursement significantly reduced when their audit revealed its fixed asset records were only 40% accurate. American Appraisal now performs a wall-to-wall inventory and reconciliation every two years, which has led to their reimbursement being adjusted back to 100%.

I want to see how my assets are being used and who is using them.
Have your internal auditors expressed concern regarding the adequacy of control over your enterprise’s fixed assets?  Have your internal or external auditors issued any negative management letter comments relative to this area of management responsibility?

C-level executives are under tremendous pressure to not only demonstrate asset control, but they also have to understand how assets under their control are being used and who is using them.  American Appraisal employs a top-to-bottom approach to help achieve the level of internal control that is appropriate to your business needs.

Our dedicated global fixed asset Consultants, a team comprised of more than 100 seasoned professionals, stand ready—no matter what business you’re in or where your assets are located.  Here’s how we managed to impress our Clients’ internal and external auditors:

• Development of cyclical physical inventory programs for various publicly held companies to address the testing of internal controls over fixed assets in accordance with Section 404 of Sarbanes-Oxley.
• External auditors recommended a major healthcare system in Texas seek an independent assessment of their fixed asset records.  American Appraisal created a solution that helped to satisfy the audit requirement while keeping the project under budget.
• A federal government entity had an audit finding that identified major assets without supportable acquisition cost and date information.  American Appraisal performed a comprehensive inventory and reconciliation resulting in a clean audit opinion the following year.

I want to see forward-looking views and what-if analyses.
American Appraisal maintains an IT consulting staff dedicated specifically to fixed asset management services such as data and software conversions as well as providing Clients with access to their data via the internet.  Our proprietary ePRAIS system is audited annually by PricewaterhouseCoopers in accordance with Statement of Auditing Standards (SAS) No. 70.  Here’s how we used technology to improve fixed asset visibility:

• Our IT staff developed a specific reconciliation application for Tenet Healthcare Corporation to accommodate the unique structure of their software system.
• We converted California Joint Powers Risk Management Authority’s reporting system to an electronic, on-line process to provide the CJPRMA with real time access to their fixed asset data as well as the added flexibility of data manipulation.  These procedures accommodate the CJPRMA’s extensive fixed assets comprising approximately 6,700 buildings and $7.0 billion in value.
• Our ePRAIS system serves as the entire fixed asset database for 72 facilities within the State of Louisiana’s Department of Health and Hospitals and Healthcare Services Division.

See what we can do for you.

If you’re contemplating fixed asset inventory & reconciliation services, ask yourself which firm brings the most experience to the table?  Who can offer a bird’s-eye view, as well as efficiently manage potentially thousands of manual tasks?  Which firm employs a team of Consultants dedicated to this practice area? When you examine the realities, we think you will find there is only one answer... American Appraisal.

We are independent.
American Appraisal focuses exclusively on valuation and related services; that independence guarantees our greater objectivity.

• This is our only business.
• We are independent of other attest, rating agency, investment banking or other conflicts.

We have the experience.
American Appraisal inventory services and best practices have evolved over eight decades, thousands of engagements and across virtually every sector of the economy, both public and private.

• Our bench strength of more than 100 full-time Consultants, together with American Appraisal’s unique corporate structure, facilitates a nimble response to global assignments.
• We offer incomparable specialization in higher education, healthcare, all levels of government in addition to a diversity of corporate sector Clients.

We are glocal.
American Appraisal, the world’s only truly glocal valuation firm™, is comprised of 900 employees, operating from offices strategically situated throughout Asia-Pacific, Europe, and North and South America.

We are experts.
Breadth and depth of expertise eliminates the need to rely on subcontractors.  Our Consultants, who have been with us an average of more than ten years, have the experience necessary to solve virtually any fixed asset management issue.

• Focused on and committed to valuation and related services since 1896
• Professional Chairmanships include the Appraisal Issues Task Force and the Appraisal Standards Board (the FASB of our profession)
• Unrivalled interaction with ASA, a key valuation standard setting agency
• Frequently presenting at national and regional conferences, including ASA, GFOA, HFMA and NPMA
• Credentials include PE, CPA, CFA, ASA, ABV, RICS, MAI, CPPM and CF

We are focused on Client needs.
American Appraisal is employee owned. We are not merely involved in valuation and related services; we are unequivocally committed to meeting Client needs.  On every engagement, direct Client access to the firm’s senior management is always the norm, never an exception.

Who we serve.

In addition to fixed asset inventory & reconciliation, American Appraisal offers the following fixed asset management services: useful life analyses, cost segregation, property management diagnostic consulting, property insurance valuations and property record outsourcing.

These services are designed to address financial reporting and property management standards, income and property tax issues, as well as regulatory compliance, including Sarbanes-Oxley and various Office of Management and Budget Circulars.

American Appraisal maintains dedicated consulting groups for manufacturing, healthcare, higher education and the public sector.  Over the past decade, American Appraisal has provided fixed asset management services to hundreds of Clients including:

3Com Corporation Bausch & Lomb Incorporated CEMEX Inc. Children’s Memorial Hospital City of Atlanta Clarian Health Partners Columbia University Community Health Systems, Inc. Cooper Tire & Rubber Company Dean Foods Company Dyno Nobel, Inc. Ford Motor Company George Washington University H.J. Heinz Company Harvard University HCA Inc. HealthSouth Corporation Kyocera International, Inc. Lockheed Martin Space Systems

M.D. Anderson Cancer Center McKesson Information Solutions LLC Memorial Sloan-Kettering Cancer Center Milwaukee Metropolitan Sewerage District NBA Properties, Inc. New York University Medical Center Northrop Grumman Ship Systems Northwestern Memorial Hospital Princeton University Stanford University State of New Mexico State of Vermont State of Wisconsin Tenet Healthcare Corporation The Mayo Clinic Jacksonville The United States Coast Guard William Wrigley Jr. Company Yahoo! Inc.