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Asset Management
The long-term successful operation of real property as an asset.
Life Span
Original Life, Chronological Age, Effective Age, & Use Life
Each component is examined by Effective Age, which is an indicator of maintenance levels, accelerated wear and tear, product quality, etc., as compared to the Chronological Age and Original Life. The rate of wear is then shown in probable Use Life Years, which will be used as the point in time for dedicated capital expense and, in some cases, the divisor of total costs for segregated funding levels.
Inventory
Inventory Quantity, Unit Cost, & Total Cost
The number of components, unit breakdown and per unit cost of the component, resulting in total replacement cost. Unit is further defined as; square feet, sf; square yards, sy; lump sum, ls; linear feet, lf.
Contributing Factors
Deferred Maintenance, Functional Obsolescence, Economic Obsolescence, & Possible Life Extension
Prevailing physical conditions exhibited by a component will be noted. Similarly, if life extension is possible, it also is noted.
Cost Analysis
Dedicated Capital Expense describes an actual cash expense by amount and the year(s) of occurrence. It dedicates existing or future cash in reserves to an expense function.
Segregated Funding treats each component as an entity, and creates a funding level based on total replacement costs divided by either the remaining useful life, or the original life expected. We present the most realistic number that would represent a dollar value equal to the annual wear and tear of the property. The funds in a segregated reserve are "pooled" (not reserved in separate accounts for each component) in the event any component expires earlier than projected or to allow phased replacement of components. |