Assessment Tasks and Instructions

Student Name Chuthamat Bangrak

Student Number AIC13993
Course and Code
Unit(s) of Competency and Code(s) SITXFIN005 Manage physical assets
Stream/Cluster
Trainer/Assessor Leanne Wiseman

Assessment for this Unit of Details

Competency/Cluster
Assessment 1 Short Answers
Assessment 2 Project

Assessment conducted in this instance: Assessment 1 2 3

Reasonable Adjustment
1. Has reasonable adjustment been applied to this assessment?
No No further information required

Yes Complete 2.
2. Provide details for the requirements and provisions for adjustment of assessment:

Student to complete
My assessor has discussed the adjustments with me
I agree to the adjustments applied to this assessment

Signature Date 20/04/23

2nd Assessor to complete

I agree the adjustments applied to this assessment are reasonable
Name Leanne Wiseman

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 Signature Leanne Wiseman Date 20/04/23
Assessment Guidelines
What will be assessed
The purpose of this assessment is to assess your underpinning knowledge to complete the tasks
outlined in the elements and performance criteria for this unit of competency and relating to the
following aspects:

 business objectives relevant to the management of physical assets:

o profitability
o growth
o providing quality products and services to customers
o adhering to:
 codes of conduct
 environmental sustainability philosophies and practices
o industry accreditation schemes
 types of physical assets required by tourism, hospitality and event organisations and the
organisation in particular:
o buildings
o computer systems
o equipment fixtures, fittings and furniture in one of the following:
 accommodation establishments
 commercial kitchens
 restaurants and bars
 storage areas
 tourism, hospitality and event offices
 transportation depots
o gardens
o pools
o rides and games
o vehicles
o vessels
 maintenance requirements for different types of physical assets
 considerations for long-term assessment of physical assets:
o ability to meet business objectives
o cost of maintenance over a period of time
o customer and staff feedback
o input from specialists where required
o operational efficiency
o safety
 equipment specifications to guide acquisition process:
o budget parameters
o environmental sustainability policies for the business
o floor plans
o numbers and types of required equipment fixtures, fittings and furniture

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 o operational performance requirements:
 efficiency
 customer traffic
 staff usage
o types of products and services offered by the business
 formats for and inclusions of asset registers specified in performance evidence
 features and benefits of different financing options for asset acquisition:
o hire purchase
o lease
o purchase
o rent
 depreciation that can be applied to different types of physical assets
 data used in the estimation of asset acquisition:
o current maintenance contracts
o estimates and quotations from suppliers
o previous contracts and costs
o published or advertised prices
 practices to support environmental sustainability using different types of physical assets.
Place/Location where assessment will be conducted including timeframes
RTO to complete

Resource Requirements
Pen, Paper or computer, internet access
Calculator

Instructions for assessment including WHS requirements

You are required to address all questions to achieve competence. Your trainer will provide you with
instructions for time frames and dates to complete this assessment.
Once completed, carefully read the responses you have provided and check for completeness. Your
trainer will provide you with feedback and the result you have achieved.

Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were
explained to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this
assessment

Student Signature: Date: 20/04/23

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 This assessment: First Attempt 2nd Attempt Extension – Date: / /

RESULT OF ASSESSMENT Satisfactory Not Yet Satisfactory

Feedback to Student:

Assessor(s) Signature(s): Leanne Wiseman Date: 20 / 04 / 23

Student Signature Date: 20 / 04 / 23

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Assessment 1

Your Task:

Answer the following questions below. All questions must be answered.

1. Provide 4 examples of sources for data to enable you to estimate reliable acquisition costs. What
does this need to consider in terms of contractual obligations and ongoing maintenance?

Responses
1. Expected duration of maintenance works

2. Types of maintenance required

3. Location of maintenance, e.g., it can be done off-site or away from heavily-trafficked areas

4. Maintenance staff requirements

Aspects to consider
The purpose of a maintenance program, or regime, is to ensure that all equipment required
for production is operating at 100% efficiency at all times and keep all areas of the business
running smoothly.
A TH&E business needs to maintain a certain level of cleanliness and quality appearance that is
expected by customers. It must be conducted with minimal disruption to the daily operations
and with minimal inconvenience to customers and staff

2. List 6 key aspects which must be considered for the long-term assessment of physical assets in
terms of nature of requirements and necessity of acquisition. Who could be typically involved in
this in terms of feedback and specialist advice?

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 Responses
1. Operational efficiency.

2. Cost of maintenance over a period of time.

3. Ability to meet business objectives.

4. Input from specialists where require

5. Safety

6. Customer and staff feedback

Involvement
Long-term asset maintenance requires careful planning. taking into account all impacts on the
business. Often the contractor has to complete some, if not all, of the work. This means that you
or the maintenance department will need to work closely with the contractor and supervise the
work to ensure that those tasks are kept within the required time limit.

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3. Explain the methods for calculating the depreciation of assets using each of the following methods:

Prime cost method

-This assumes the asset’s value decreases at a fixed rate each year
-This method suits calculating assets such as furniture which gives the same benefits to the
business each
year (no variation so a fixed rate suits)

Annual depreciation amount of an asset = Cost minus Residual value /divided by Life

For example: The Annual depreciation amount of a new wine fridge cost $3000 (cost - including
purchase price, installation and delivery) and was sold at $1000 (residual value) and was owned by
the business for 5 years (Life span)

Annual depreciation amount of an asset = $3000 (Wine fridge) minus $1000 (Sold) / 5 (5 years)
Annual depreciation amount of an asset = 3000 – 1000 / 5
= 2000 / 5
= $400 or 20% every year

Diminishing Value Method

• This assumes the asset’s value changes each year

• This method of calculation suits assets that deteriorate with usage over time and require
maintenance and repairs such as wine fridges and vehicles

For example:
The first year’s depreciating value is calculated below
=
Annual depreciation amount of an asset (year 1) =base value x days held 365 x 200% Asset‘s
effective life

A car purchased at the base value of $60,000 at the beginning of the financial year has an
effective life of 10 years

Annual depreciation amount of an asset (year 1) =60000 x 365 365 x 200% 10

Annual depreciation amount of an asset (year 1) =60000 x 1 x 0.2
Annual depreciation amount of an asset (year 1) = $12,000

The second year’s depreciating value is

calculated below:
Written down value = 60000 -12000 = $48,000

Annual depreciation amount of an asset (year 2) Written down value x days held 365 x 200%
Asset‘s effective life
Annual depreciation amount of an asset (year 2) = 48000 x 365 / 365 x 200% /10
Annual depreciation amount of an asset (year 2) = 48000 x 1 x 0.2

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 Annual depreciation amount of an asset (year 2) = $9,600

4. List 3 examples for environmental sustainability that applies to physical assets and outline the
environmental and financial benefits as applicable:

Example Environmental and financial benefits

Compost organic wastage - reduce landfill and recycle nutrients back

into plants.
- Save waste disposal fee

Reduce overall electricity usage by turning off - save energy bill

lights and appliances - reduce energy consumption.

Reduce water wastage - Use recycled/grey water for the

Gardens
- Save water bill for business

5. List 5 physical assets relevant to your workplace or training and provide the maintenance details
typically required for each:

Physical asset Maintenance requirements

1. Equipment These require repairs and maintenance routinely
to comply with WHS (Work Health and Safety)
regulations as well as maintaining its value
overtime

2. Land, building and other structures These normally appreciate in value over time

3.Computer and other IT systems Allows operational efficiency resulting in saving

time and money

3. Vehicles and vessels Transports goods for the business

4. Furniture Investing in quality furniture for a hotel increases

the value of the rooms and thereby increases the

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 prices and therefore the profits

6. Provide 8 examples for different types of physical assets required by tourism, hospitality and event
organisations:

Responses
1. Furniture
2. Equipment
3. Fittings and fixtures
4. Maintenance equipment
5. Furniture
6. Gardening equipment
7. Computer and other IT systems
8. Vehicles and vessels

7. Which details need to be recorded in an asset register for each physical asset?

Responses
An Asset Register documents all the fixed and loose assets owned by an organization. It is a
valuable asset ID and tracking tool.

Our inspectors attend the property to conduct a full site inspection and record the following
details:
- The make, model, and serial number of each item
- The physical location within the premises
- A description of its physical attributes and condition
- The asset class or category

8. How can the following business objectives influence the methods used for managing physical
assets in an organisation? Provide 1 example for each:

 Profitability

If profitability is a primary concern A detailed ROI has to be implemented and the total cost will
be a key factor in the decision. in another situation Certain assets may be absolutely necessary
to provide certain products or services. in this situation Total cost is less important than the
function of the asset. and is guaranteed to continue to work.

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  Growth

If the objective is to grow the business Guidelines for purchasing assets and managing any The
produce life cycle and future use of the asset must be taken into account. Any new assets must
have the capacity to support the required future workloads or activities. It's not just the current
level of demand.

 Providing quality products and services to customers

Properties such as furniture and amenities therefore influence possible ratings. Basic
appointments will result in lower scores. This will affect the price that can be placed in the room.
Spending more and taking care of regular maintenance can result in higher ratings. This will
enable them to charge higher prices. Again, the return on investment needs to be carefully
calculated.

 Adhering to:
o codes of conduct
o environmental sustainability philosophies and practices

External influences may also need to be considered when making strategic asset management
decisions. Industry codes of conduct and accreditation schemes may dictate to some extent
how decisions are made. For example, the Australian Accommodation Star Classification
Scheme covers a wide range of accommodation and consists of ratings from one to five stars in
Australia and New Zealand. One star provides clean basic accommodation. while five stars
represent outstanding international standards.

 Industry accreditation schemes

When considering a major investment, you will need to conduct thorough research. You will need
to justify the expenditure on the basis that it will improve your business. Also, you will need to
think strategically in order to prioritise expenditure. While there may be an excellent investment
opportunity, if it impacts on your operations so much that your business stops functioning, then
it is not worth it. Additionally, you need to realise that many investments can lead to a disruption
of operations to some degree, such as an extension to or refurbishment of the premises. The
long-term effects must always be weighed up

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9. Provide an overview of the features, advantages and disadvantages of each of the following
financing options when acquiring assets:

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 1. Hire purchase
Advantage:
- Paying the item in a one-off payment and using the item short term is cheaper than paying for
the full amount e.g. hiring a marquee or other outdoor furniture for a one off event
- Low capital outlay.
- There is no risk with purchasing the asset.

Disadvantage:
- The business does not have full control of the asset until full payment is made.
- The return of the asset if payments cannot be made or if the customer is unsatisfied with the
asset results in a penalty that could be costly to a business.

2. Lease
Advantage:
- Lower capital expenses allowing cash flow in the business for other expenses.
- The business can constantly be using updated technology.
- Flexibility and opportunity for growth.

Disadvantage:
- Lease termination may be costly.
- Rent may increase when the business wishes to renew the lease.
- The business sacrifices the opportunity on increasing capital gains.

3. Purchase
Advantage:
- Asset ownership.
- Equity increase.
- Capital gains potential.
- Control over assets.

Disadvantage:
- Risk in ownership of assets.
- Maintenance costs.
- Cash flow may be negatively affected

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 4. Rent
Advantage:
- One-off payment
- Low capital outlay
- No risk associated with acquiring the asset
- No maintenance costs
- Tax deductible cost

Disadvantage:
- High cost per use
- No ownership

10. The following are parameters which are used to guide the acquisition of physical assets. Provide
examples and details for what should be considered, for each aspect.

Budget parameters

Has a budget already been allocated for this acquisition?

Is the desired asset within the budget?

Does the budget need to be adjusted to accommodate the asset?

How will that impact on other operational areas of the business?

Environmental sustainability policies for the business

Asset acquisitions should fit within the business’ environmental policies. Specifications should
be developed detailing emissions, resource efficiency, ongoing resource usage, etc. to ensure
appropriate assets are chosen.

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 Site plans

There may be physical constraints which must be met, e.g. dimensions of access points, or
available space for a piece of equipment to fit. It is essential to understand how the asset will be
used within the workplace and whether the asset will improve or fit into the workflow. For
example, a new piece of kitchen equipment might need to fit into a certain area of the kitchen so
that it does not interrupt the movement of staff and workflow of items

Auxiliary items

Different possibilities for a particular asset Analysis may be required for other items. Related that
need to be received and stored or installed as well This may include fixtures and fittings and
furnishings needed to renovate or enhance the common property. Available storage space and
other operational impacts can affect this.

Performance requirements

Acquired assets are used as part of a production workflow or service offering. You will then need
to determine the desired output level and other aspects of the operation. Need to develop
various aspects such as items produced per hour. Speed of work, efficiency, traffic of customers
or employees. Failure rate maintenance requirements and other parameters have to be
developed.

Suitability to products and services offered

All assets must be analysed to ensure they are suitable for their intended use. The products and
services offered by the business must be considered to ensure that the desired level of service
and customer outcomes can be achieved, for example the vehicle must be suitable for use, for
example if organizing an off-road tour, a 4WD vehicle is ideal.

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11. Go to the ATO website link provided below and source the information for the current simplified
depreciation rules which apply:

https://www.ato.gov.au/Business/Income-and-deductions-for-business/Depreciating-
assets/Simpler-depreciation-for-small-business/

Responses
The simplified depreciation rules apply to small businesses who wish to write-off particular assets
that cost less than the designated threshold amount, which are purchased and used/installed and
ready to use in the same year they are being claimed.

You can elect to use the simplified depreciation rules if you are a small business with an
aggregated
turnover of less than:
- $10 million from 1 July 2016 onwards.
- $2 million for previous income years.
Additionally, if your business has an aggregated turnover of $10 million to $50 million,
you can claim instant tax write-offs too from 7.30pm on 2 April 2019.

What assets can I write off? Assets must meet the following criteria:
- The entire cost of the asset must be below the relevant threshold.
- The asset can be used or new, it doesn't matter.
- The asset that you are writing off must have been first used or installed/ready to be used in the
same income year that it is being claimed in.

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