UNIVERSITY OF MAKATI

J. P. Rizal Ext., West Rembo, Makati City

COLLEGE OF BUSINESS AND FINANCIAL SCIENCE
Department of FINANCE MANAGEMENT
Course Title Title
Module No. 6
FINANCIAL MANAGEMENT 2

FINMAN 2 Module Leader PROF. RENNIEL B. HALLERA

Module Contributors none

Time Frame:
You are expected to finish all the activities, assignments, and assessments
of this 7th week of the semester.

How to Complete this .

module? 1. Complete the reading assignment
2. View the shared educational video/reading materials about the course.
3. Participate in this week’s discussion (if any)
4. Complete the Module 6 requirement given by the professor
5. Submit other required outputs

Teaching Strategies Use of UMAK-LMS- TBL, Suggested Education video about the subjects , Online
discussion (GoogleMeet, Zoom, Messenger, Google classroom) Voice-over
PowerPoint, or video-recorded lectures, Online links, and Online quizzes.

INTRODUCTION

Asset management refers to the process of developing, operating, maintaining, and selling assets
INTRODUCTION

in a cost-effective manner. Most commonly used in finance, the term is used in reference to
individuals or firms that manage assets on behalf of individuals or other entities. Asset
management is the process of planning and controlling the acquisition, operation, maintenance,
renewal, and disposal of organizational assets. This process improves the delivery potential of
assets and minimizes the costs and risks involved. Adequate maintenance and proper
deployment of systems, people, and processes ensure a positive enhancement of capital over
the asset lifecycle
LEARNING OUTCOMES

By the end of this module , you should be able to

1. Knowledge: Definition and Importance of Asset management

2.
3. Skills: Assess the best practices of the organization when it comes handling their on asset
to achieve the organization’s goal

4. Attitude: The learner will be more participative in learning the asset management strategy

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 Asset Management

Every company needs to keep track of its assets. That way, its stakeholders will know which
assets are available to be employed to provide optimal returns. The assets owned by any
business fall into two main categories: fixed and current assets. Fixed or non-current assets refer
to assets acquired for long-term use, while current assets are those that can be converted into
cash within a short amount of time.

When it comes to asset management, managers often deal with two main concerns. The first is
what role does the asset management process play? Second, how can a firm develop a good
asset management plan?

Importance of Asset Management

 Enables a firm to account for all of its assets

The process makes it easy for organizations to keep track of their assets, whether liquid
or fixed. Firm owners will know where assets are located, how they are being put to use,
and whether there have been changes made to them. Consequently, the recovery of
assets can be done more efficiently, hence, leading to higher returns.
CONTENT

 Helps guarantee the accuracy of amortization rates

Since assets are checked on a regular basis, the process of asset management ensures
that the financial statements record them properly

 Helps identify and manage risks

Asset management encompasses the identification and management of risks that arise
from the utilization and ownership of certain assets. It means that a firm will always be
prepared to manage any risk that comes its way.

 Removes ghost assets in the company’s inventory

Instances exist where lost, damaged, or stolen assets are erroneously recorded on the
books. With a strategic asset management plan, the firm’s owners will be aware of the
assets that have been lost and will eliminate them in the books.

Developing a Strategic Asset Management Plan

Asset ownership is part of any public or private enterprise. To manage the assets effectively, a
firm owner needs to develop a strategic plan.

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 1. Complete an asset inventory
Before anything else, an owner needs to take count of all the assets that he owns. If he is
not aware of the exact number of assets in his inventory, then he won’t manage them
effectively. When preparing an inventory of company assets, the following should be
included:
 Total count of assets
 Where the assets are
 The value of each asset
 When the assets were acquired
 The expected life cycles of the assets

2. Compute life-cycle costs

If a business owner wants his asset management plan to be precise, then he should
calculate the entire life-cycle costs of each asset. Many company owners make the mistake
of calculating only the initial purchase costs. During the asset’s life cycle, additional costs
are likely to come up such as maintenance expenses, condition and performance
modelling, as well as disposal costs.

3. Set levels of service

After computing the life-cycle costs, the next step is to set levels of service. Put simply, it
means outlining the overall quality, capacity, and role of the different services that the
assets provide. In doing so, a firm’s owner can then determine the operating, maintenance,
and renewal activities needed to keep the assets in good condition.

4. Exercise long-term financial planning

Ideally, the asset management process that a firm owner adapts should easily translate
into long-term financial plans. With a good financial plan in place, the owner can then
assess which objectives are feasible, and which ones need to be prioritized.

Types of asset management

 Physical asset management stands for the process of handling things like fixed asset
management, inventory management, infrastructure, and public asset management.
 Financial asset management refers to the process of managing procurement, developing
an investment strategy, controlling budget and costs, handling cash, bonds, and stocks.
 Contractual compliance streamlines processes like IT asset management, digital asset
management, contractual maintenance, and management of intangible assets.

Key components of an effective asset management process include:

 Preparing an asset register: An inventory list of available assets
 Identify asset conditions and rating system
 Track asset depreciation accurately at timely intervals

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  Determine the value of assets and their replacement cost
 Move away from reactive to predictive asset maintenance
 Focus more on change management to ensure database integrity
 Eliminate paperwork and automate tasks like data collection, asset reporting, and more

What Does an Asset Manager Do?

The role of an asset manager consists of determining what investments to make, or avoid, that
will grow a client's portfolio. Typically, the advisor will invest in products such as equity, fixed
income, real estate, commodities, alternative investments and mutual funds. Rigorous research
is conducted utilizing both macro and micro analytical tools. This includes statistical analysis of
the prevailing market trends, interviews with company officials, and anything else that would aid
in achieving the stated goal of client asset appreciation.
ASSIGNMENT

1. Research; Kindly research a case study of a company pertaining to asset management. Discuss the
best practices
ASSESSMENT

Recitation or Class Participation thru online via Zoom or any instructed by the school
Lecture Analysis
Reaction paper thru Google classroom

Rule: In a self-paced and self-contained online classroom, Rubric is required to guide students how to
perform the task assessments.

Lesson Analysis of reading materials

Critical Analysis ( reaction paper about the reading materials provided) 80%
RUBRICS

Writing Skills (Grammar/Sentence Construction) 20%

With Online discussion/ Face to face class

Note
In the event of online discussion- Presentation skills 30%
Summary (Quizzes and Activities) 20%
Critical Analysis ( Reaction paper about the reading materials provided) 40%
Writing Skills (Grammar /Sentence construction) 10%

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 https://www.investopedia.com/terms/a/assetmanagement.asp#:~:text=Understanding%20Asset%20Man
agement-
REFERENCES

,Asset%20management%20refers%20to%20the%20management%20of%20investments%20on%20beh
alf,over%20time%20while%20mitigating%20risk.&text=The%20role%20of%20an%20asset,will%20grow
%20a%20client's%20portfolio.

https://www.bankinghub.eu/themen/asset-management

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