Developing Physical Asset Register for Acumen Kitchen and Restaurant

ASSESSMENT 1- PROJECT
1

Part A – Asset Register
1. Developing a Physical Asset Register for the Acumen kitchen and restaurant
The asset for Acumen kitchen includes things owned by the business that cannot be readily
converted into cash. In the asset management system to monitor and maintaining assets of the
business, a register is developed (Davis, 2016). The asset register records all crucial information
related to an asset of the business. The financial staffs and operational staffs need to keep track
of the physical assets. The account will keep details of the net value of each asset by means of
allocating an annual rate of depreciation. Any sales or purchase related to an asset need to be
included in the register (Jurczenko and Maillet, 2012, pp 113-163). Annual checks will ensure,
the existence of the assets and tallying with information represented. The physical asset register
for Acumen Kitchen is developed as below for its building, computer systems, equipment
fixtures, fittings and furniture in the kitchen or at the restaurant.
2. Asset Register
Organization – Acumen Kitchen Month – January Year 2019
Asset
Serial
Number
Description
of assets
Current
Location Purchase
date
Cost Depreciation
amount to
date $
Closing
Written
down
Values
Date last
verified
Building
Computer
Systems
Equipment
fixtures
Fittings
and
Furniture
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Part B – Maintenance, repair, and replacement
1. Developing a Maintenance Register
An equipment repair and maintenance are life for every restaurant and kitchen operator.
Especially in case a kitchen or equipment gets older, keeping a repair history is impossible in
absence of a repair and maintenance register (Soro, Nourelfath and Aït-Kadi, 2010, pp 65-69).
The register allows keeping track of service calls so as to hold service companies accountable for
their works. A register helps track warranties and purchase information that includes models and
serial numbers. It allows listing of vendors along with alternate vendors, especially when service
is needed. It allows recording of service problems, cost of service and date for service calls. The
register would allow including maintenance requirements for assets ensuring no disruption in
operations or in environmental sustainability takes place (Hastings, 2010). While some assets,
there are lease clauses and for some, there are service contract agreements. For other assets, user
manuals need to consulted or manufacturer's recommendations along with consideration of the
frequency of use to Acumen.
Asset Maintenance Logsheet
Name of the piece of asset: Building
Label:
Serial number:
Manufacturer:
Manufacturer's contact person + contact details:
Date of purchase:
Date put into service:
The person responsible for an asset:
Initials of the person authorized to use asset:
Location of asset: Australia
Physical condition: Old
The service provider (for maintenance and calibration): Jackson Property Pty Ltd
Service provider contact person + contact details: [phone]
Frequency of maintenance: Yearly
Date: Description of Maintenance Date of Validation Next Remarks:
3

maintenance: performed by: validation
before put
into service:
performed
by:
maintenance
planned on
(date):
10
Jan
2019
Crack
maintenance
and repair
Mr. Samui,
Jackson
Property Pty
Ltd 15 Jan 2019
Mr. Carson,
Jackson
Property Pty
Ltd
10 September
2019 All ok
Name of the piece of asset: Computer systems
Label: 220 W; 230 VC; 50Hz
Serial number: LG-DAC-556
Manufacturer: LG
Manufacturer's contact person + contact
details:
Mr. Sampson, LG Electronics Brisbane + +61 524
9874
Date of purchase: 20 August 2016
Date put into service: 21 August 2016
Person responsible for asset: Mr. Chaplin (IT Department )
Initials of person authorized to use asset:
Location of equipment: Restaurant
Physical condition: Excellent
Service provider (for maintenance and
calibration): LG Electronics
Service provider contact person + contact
details:
Mr. Michael, LG Electronics Brisbane + +61 685
9884
Frequency of maintenance: 6 monthly
Date
:
Description
of
maintenan
ce:
Maintenan
ce
performed
by:
Date of
validati
on
before
put into
service:
Validatio
n
perform
ed by:
Next maintenance planned on
(date):
Remarks:
10
Jan
2019
Crack
maintenan
ce and
repair
Mr.
Samui,
Jackson
Property
Pty Ltd
15 Jan
2019
Mr.
Carson,
Jackson
Property
Pty Ltd 10 September 2019 All ok
4

Name of the piece of asset: Mixer and Grinder
Label: 220W; 230 VC; 50Hz
Serial number: KA-AMW-196
Manufacturer: Panasonic
Manufacturer's contact person + contact
details: Mr. Robinson, Panasonic Melbourne + [phone]
Date of purchase: 10 June 2015
Date put into service: 10 June 2016
Person responsible for asset: Mr. Robinson (Kitchen Head)
Initials of person authorized to use asset:
Location of asset: Kitchen
Physical condition: Poor, motor sometimes not working
Service provider (for maintenance and
calibration): Panasonic Electronics
Service provider contact person + contact
details:
Mr. Richard, Panasonic Electronics Brisbane + +61
544 7451
Frequency of maintenance: 6 monthly
Date
:
Descriptio
n of
maintenan
ce:
Maintena
nce
performe
d by:
Date of
validati
on
before
put
into
service:
Validatio
n
perform
ed by:
Next maintenance planned on
(date):
Remarks:
10
Dec
201
8
Motor
Replaceme
nt and
overall
repairing
Mr.
Richard,
Panasonic
15 Dec
2018
Mr.
Rich,
Panasoni
c 10 September 2019 All ok
Name of the piece of asset: Furniture
Label:
Serial number:
Manufacturer:
Manufacturer's contact person + contact details: Mr. Jimmy Sheldon + [phone]
Date of purchase: 20 August 2016
Date put into service: 21 August 2016
5

Person responsible for asset: Mr. Samuel
Initials of person authorized to use asset:
Location of equipment: Restaurant
Physical condition: Excellent
Service provider (for maintenance and calibration):
Service provider contact person + contact details: Mr. Samuel, Sydney + [phone]
Frequency of maintenance: 6 monthly
Date: Description of
maintenance:
Maintenance
performed
by:
Date of
validation
before put
into
service:
Validation
performed
by:
Next maintenance
planned on (date):
Remarks:
10
Jan
2019
Crack
maintenance
and repair Mr. Samuel
15 Jan
2019
Mr.
Samuel 10 September 2019 All ok
Name of the piece of asset: Chimney
Label: 220W; 230VC; 50Hz
Serial number: PC-3WAS-985
Manufacturer: PC Electronics
Manufacturer's contact person + contact
details:
Mr. Robert, PS Electronics Brisbane + +61 475
6584
Date of purchase: 20 August 2016
Date put into service: 21 August 2016
Person responsible for asset: Mr. Smith (Kitchen Department )
Initials of person authorized to use asset:
Location of equipment: Kitchen
Physical condition: Excellent
Service provider (for maintenance and
calibration): PS Electronics
Service provider contact person + contact
details:
Mr. Robert, PS Electronics Brisbane + +61 475
6584
Frequency of maintenance: 6 monthly
Date
:
Description
of
maintenan
ce:
Maintenan
ce
performed
by:
Date of
validati
on
before
Validatio
n
performe
d by:
Next maintenance planned
on (date):
Remarks:
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put into
service:
10
Jan
2019
Motor not
functioning
Mr.
Robert, PS
Electronics
15 Jan
2019
Mr.
Robert,
PS
Electroni
cs 10 September 2019
Need to be
replaced
Name of the piece of asset: Coffee Vending Machine
Label: 220W; 230VC; 50Hz
Serial number: PC-3WAS-985
Manufacturer: PC Electronics
Manufacturer's contact person + contact
details:
Mr. Robert, PS Electronics Brisbane + +61 475
6584
Date of purchase: 20 August 2016
Date put into service: 21 August 2016
Person responsible for asset: Mr. Smith (Kitchen Department )
Initials of person authorized to use asset:
Location of equipment: Kitchen
Physical condition: Excellent
Service provider (for maintenance and
calibration): PS Electronics
Service provider contact person + contact
details:
Mr. Robert, PS Electronics Brisbane + +61 475
6584
Frequency of maintenance: 6 monthly
Date
:
Description
of
maintenan
ce:
Maintenan
ce
performed
by:
Date of
validati
on
before
put into
service:
Validatio
n
performe
d by:
Next maintenance planned
on (date):
Remarks:
10
Jan
2019
Motor not
functioning
Mr.
Robert, PS
Electronics
15 Jan
2019
Mr.
Robert,
PS
Electroni
cs
10 September 2019 Need to be
replaced
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2. Maintenance Plan
The information from the maintenance register will be used to develop the maintenance plan for
each and every asset (Márquez et al. 2009, pp 167-178). The maintenance plan will ensure that
each and every asset is properly maintained and each aspect is addressed to.
a. Reporting and monitoring: Each of the types of assets mentioned in the reporting and
maintenance registered will be frequently monitored according to set schedules.
Reporting of asset condition for each asset to report their functionality using suitable
procedures that encompass creating provisions and including advice for complex issues.
As in the case of the building, furniture, and fixture no special provision needs to be
created as they are relatively in an appropriate condition (Gulati and Smith, 2009).
However, for the mixture and grinder, chimney and coffee vending machine, provisions
need to be created and money needs to be kept aside such that they can be replaced
within a specific time period.
b. Collecting and recording feedback: For each and every asset regular and frequent
feedback needs to be collected, especially from staffs, report, and customers. Feedback
from customers can be got regarding the physical assets such as furniture, fixture,
building and other physical assets which easily customers can review. Feedback of staff
regarding kitchen and restaurant equipment can be ascertained so that the working
conditions of this equipment can be understood. The reports will be able to reflect the
conditions of these assets as recorded. It will include the date of purchase, servicing,
physical conditions, repairs and so on.
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c. Types of Maintenance Required: There will be varied types of maintenance required for
each and every asset. For some assets, there will be needed routine maintenance whereas,
for others, there will be need of annual or six monthly maintenance. The air conditioners,
doors, fixing furniture, air conditioner filter and water filter cleaning will be conducted
on a regular basis. This regular maintenance will be conducted by in-house staffs present
at the restaurant as it does not require any specialized skills or techniques. Whereas
servicing and repairing of the chimney, mixer and grinder, the coffee vending machine
will be conducted on an annual or 6 monthly bases. This maintenance will be conducted
by expertise personnel from specific servicing companies.
d. Location of Maintenance: Most of the maintenance will be conducted within the kitchen
or restraint area premises. Only a few maintenance and repairs of assets or equipment
which cannot be undertaken will be conducted off-site at the manufacturer or Service
Company’s location.
e. Expected Duration of Maintenance Works: The expected duration of maintenance work
will be according to the maintenance and repairs required. While an air conditioner
maintenance might require a period of 2 hours, maintenance work for the building might
need a month's time. Similarly, coffee vending machine, mixer and grinder and other
smaller equipment maintenance time period will range from a few hours to a day or two
maximum. For larger assets and equipment, the maintenance time period will range from
a month to 6 months at the maximum, for example, maintenance and repair work for
furniture and fixture, building and so on.
f. The timing of scheduled maintenance: Each maintenance work will be scheduled at
different times and at different periods, coordinating amongst them and ensuring the
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work is conducted and completed in a timely fashion. As Acumen is a restaurant and
kitchen based organization which open for lunch and continues till dinner time, most
maintenance works will take place during morning hours. The morning hours during the
day when the restaurant does not have much influx of customers, it will schedule its
maintenance and service personnel during such time period.
g. Disruption to Operation: All maintenance will be scheduled during morning hours to
ensure minimum disruption to service. In the case of disruptions in service, the restaurant
will be impacted as the kitchen will not be able to function appropriately. In case a mixer
and grinder or coffee vending machine stop working, then there might be a disruption in
the food and beverage service, leading to a loss of revenue for the restaurant. Hence, the
restaurant will plan and keep a possible replacement such that it can easily continue with
its various services.
h. WHS Issues: The WHS issues that need to be attained in case of maintenance and
repairing is to ensure that all safety precautions are abided by. Each and every asset need
to be checked that they abide by WHS and will not cause any harm to any personnel
operating it. The checklists for servicing and maintenance of assets and equipment will
need to include WHS requirement and evaluated from time to time.
i. Legal and Regulatory Requirements: Each asset has a varying legal and regulatory
requirement. Especially physical assets during the course of the financial year will need
to be monitored and evaluated such that they correspond to and can meet the legal and
regulatory requirement effectively. Assets such as all electrical equipment and other
assets will need to be checked such that they fall in the required legal framework as
prescribed for restraint and kitchen use. All pollution exhausting equipment will need to
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be checked for their pollution certificates such that they can abide by environmental
norms.
j. Summary of Cost Impacts: Repair and maintenance require significant amounts of costs
and it has an impact on the overall organization. In case of equipment which can easily be
maintained by a human resource of Acumen, then in case of non-compliance or failure to
integrate maintenance will lead to penalty rates for staffs. In case maintenance is carried
out for contractors engaged in maintenance requirements, costs will need to be borne by
the organization. Contractors engaged for specific maintenance requirement will be
formed annual maintenance contracts such that they frequently visit and monitor the
performance of the asset they are responsible for handling.
k. Cost of Scheduled Maintenance: The cost for scheduled maintenance will include the cost
for parts, required equipment to perform for maintenance and consumables. A total
maintenance contract will cost the Company annually $15,000. This costs will exclude
costs incurred for any replacement and incidental costs.
l. Provisions for monitoring of financial performance: At every instance, there will need to
be monitoring of financial performance of all assets in the budget period Crespo
(Márquez et al. 20009, pp 167-178). Monitoring of financial performance will encompass
all costs that will be paid to contractors, servicing personnel and any incidental costs. A
budget will be prepared, taking into consideration last year’s data and then an additional
10% will be added to the costs.
m. Occurrence: The occurrence of the budget will require forming a review or audit of the
performance or determining asset viability. The financial performance will be reviewed
and conducted on an annual basis at the end of the financial year. Every end of the
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financial year, the asset viability and performance of assets will be determined so as to
prepare a contingency fund for replacing of the asset.
3. Replacement of Items
Acumen decided upon replacing the computer in the restaurant, the chest freezer, and the coffee
machine. The computer will need to be replaced so that a newer computer system with various
updated software and a faster processing system can be instilled. The new computer will be
discarded as it did not possess the ability to process complex functionality. The new computer
will be able to conduct multiple operations at the same time and have the capability to process
different information altogether. The computer will have an attached printer to print bills and
invoices and include capabilities of complex transaction processing systems. The chest freezer
was not cooling enough to store and preserve food products for longer time duration. The newer
chest freezer will be of a larger size to accommodate more stock. It will come with in-built
temperature control and monitoring to maintain appropriate temperatures of food products. The
coffee machine was traditional and the new coffee machine will have several options for making
coffee and will include automatic disbursal system. The new asset will be a valuable addition to
the organization and allow ease of business expansion at a later period.
4. Approval Form for Physical Asset Acquisition/ Replacement
The disposal of assets and requisition for the new asset will need to follow a procedure. An
approval form for acquiring or replacing an asset with the new item will need to be filled to
ensure compliance requirements are met.
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Asset Acquisition / Replacement Form
Asset Serial
Number
Asset
Description
Capacity Performance Size Location Budget
$
Computer Average Restaurant 2,000
Coffee Machine 5 liters Getting Stuck Kitchen 1,000
Chest Freezer 50 l Not Cooling Kitchen 3,000
5. Quotes from Suppliers
While replacing an asset, it becomes imperative to finalize quotes from different suppliers. While
the organization has fixed suppliers for assets, the quotes will be obtained from 3 different
suppliers for comparing prices. Supplier 1 for Computer has given a budget for a computer of
$1500 including all features and functionality, for coffee machine $1200 and for chest freezer
$2800. Supplier 2 has given a budget for a computer of $2500 including all features and
functionality, for coffee machine $2000 and for chest freezer $3500. Supplier 3 has given a
budget for a computer of $1800 including all features and functionality, for coffee machine
$2000 and for chest freezer $3200.
6. Financing Options
In order to acquire the assets, various financial institutions were contacted as well as suppliers to
understand the different available financing options and their respective costs. There were a total
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of 2 financial institutions contacted for obtaining financing for the assets and 3 suppliers were
contacted.
7. Finance Variables
Each of the financial institution and supplier provided with variants in finance options for each
asset. For each asset, it is necessary to calculate the financial impact that is generated so that an
appropriate choice can be made. From all the available suppliers and financier options there were
two choices primarily given, as below;
Asset Option 1 Option 2
Computer Down payment $500 + rest in
equated monthly installments
for a period of 6 months
(interests on total 0%)
Equated monthly installments
for 12 months at 17% interest
Chest Freezer Down payment $500 + rest in
equated monthly installments
for a period of 6 months
(interests on total 0%)
Equated monthly installments
for 12 months at 17% interest
Coffee Machine Down payment $500 + rest in
equated monthly installments
for a period of 6 months
(interests on total 0%)
Equated monthly installments
for 12 months at 17% interest
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The first option required the organization make a substantial amount of down payment for
purchasing of the asset, but there is no interest accumulated for rest payments. The second option
offers ease of payment for the entire option in equated monthly installments of 12 months, which
will yield an interest amount of 17%. Though the first option required a higher amount of cash
expenditure to be made, it earns no interests for the company, on the contrary, the second option
requires the company pay interests for purchasing of the asset. The first option is more suitable
for the Company, as it has already set aside a fund for acquisition of the assets at a future date.
8. Finalization of Assets
Once the asset has been deemed to be purchased or replaced, then an official process has to be
followed for the same. The processes that will be followed are the processes existing at the
workplace and which are common and inherent to the industry’s standards as well and it
includes;
o Legal contracts: A legal contract needs to be formed with the supplier or vendor from
whom the purchase is being made. The legal contract will ensure the quantity of
purchased items, prices, financing schemes opted for if any, free services provided and
so on. The legal contract will be designed according to format provided by a legal expert
and furnished at the time of making the purchase.
o Requirements and documentation: The necessary documentation will need to be
prepared for the purpose of acquisition and financing methods opted. The documents
will be kept as records for future use and will include details of the transaction. A stock
of items will be recorded when purchase is made.
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o Preparing a document for disposing: Documents for disposal of assets need to be
prepared. It needs to include necessary tax implications such that it can be refereed for
all future use.
References
Crespo Márquez, A., Moreu de León, P., Gómez Fernández, J.F., Parra Márquez, C. and López
Campos, M., 2009. The maintenance management framework: A practical view to maintenance
management. Journal of Quality in Maintenance Engineering, 15(2), pp.167-178.
Davis, R., 2016. An Introduction to Asset Management. A Simple but Informative Introduction to
the Managemnent of Physical Assets.
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Gulati, R. and Smith, R., 2009. Maintenance and reliability best practices. Industrial Press Inc..
Hastings, N.A., 2010. Physical asset management (Vol. 2). London: Springer.
Jurczenko, E. and Maillet, B., 2012. The four‐moment capital asset pricing model: between asset
pricing and asset allocation. Multi
‐moment Asset Allocation and Pricing Models, pp.113-163.
Márquez, A.C., de León, P.M., Fernández, J.G., Márquez, C.P. and Campos, M.L., 2009. The
maintenance management framework: a practical view to maintenance management. Journal of
Quality in Maintenance Engineering, 15(2), pp.167-178.
Soro, I.W., Nourelfath, M. and Aït-Kadi, D., 2010. Performance evaluation of multi-state
degraded systems with minimal repairs and imperfect preventive maintenance. Reliability
Engineering & System Safety, 95(2), pp.65-69.
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