REVIEW
of
FINANCE -
Apr. 2018
39
situation of increase or decrease of fixed assets
according to capital sources for formation of fixed
assets so as to work out measures to efficiently
use such capital sources.
Report on the increase and decrease of use
of fixed assets: Provide indicators reflecting the
situation of increase, decrease and use of fixed
assets in order to compare the plan of purchase,
payment, sale and plan of using fixed assets of
the unit.
In addition, construction companies should
prepare cost estimates for fixed assets. This is a
very necessary report for all businesses. The fixed
asset cost estimate report is the development of
a fixed asset procurement operation plan, the
information in the fixed asset estimate report also
provides criteria for assessing the effectiveness of
using the fixed asset, which helps administrators
involves seeking investment resources related to
fixed asset and using fixed asset effectively in the
enterprise.
Making long-term decision
Decision-making is not only the basic function
of manager, but also their most complicated and
difficult task. In the process of running a business,
the manager must always face decision-making in
a variety of forms.
The enterprise analyzes information for
decision making in the procurement of fixed
assets, determining the purchase or renting fixed
assets, determining the way whether to purchase
or rent fixed assets.
In addition, the analysis of fixed assets use
efficiency through basic index such as return on
asset (ROA) of fixed asset, number of rotation of
assets, etc.
The index of rotation number of a fixed asset
is calculated as follows:
Number of rotation of fixed assets = Total net
revenue/Average fixed assets
This index reflects one Vietnamese Dong of
fixed asset in the period that generates how much
revenue or net revenue. The higher this index, the
higher the efficiency of fixed asset use.
The ROA is calculated as follows:
Return on total assets = (Profit after tax x 100)/
Total average assets
This index reflects one Vietnamese Dong
of fixed asset in the period that generates how
much profit. The higher this index, the higher the
efficiency of fixed asset use.
Conclusion
Fixed assets are one of the most important
documents of construction enterprises. In the
context of increasingly cutthroat competition, with
the applications of the 4.0 technology revolution,
which brought about tremendous changes in
the technology of construction machinery and
equipment has produced construction products
with high quality and dominate the market.
Construction firms are in different locations
and usually take place outdoor. Since the
construction of the infrastructure takes place
outdoor so it is directly affected by environmental,
natural and weather conditions, in many places.
The construction has a seasonal characteristics.
Production of basic construction in many
different locations, so fixed assets are also often
moved by the construction projects. Therefore,
the management of fixed assets is necessary to
improve the quality of works and the efficiency
of using fixed assets.
Fixed assets management accounting is
considered being one of the most effective tools for
managers in construction enterprise to improve
the quality of fixed assets’ utilization, improve
projects quality, lower product cost. At the
same time, fixed assets management accounting
provides useful information to help managers in
planning and decision-making related to fixed
assets in the most effective way, especially in the
trend of industrial revolution 4.0.
References:
1. Pham Van Duoc - Dang Kim Cuong (1995), Management Accounting
and Business Analysis, Statistical Publishing House, Hanoi;
2. Nguyen Phu Giang (2005), Management Accounting and Business
Analysis, Financial Publishing House, Hanoi;
3. Nguyen Dang Hac (2011), Cost accounting in construction, Construction
Publishing House;
4. Nguyen Thi Phuong Hoa (2011), Management controlling curriculum,
Publisher of National Economics University, Hanoi;
5. Dang Thi Hoa (2006), Management accounting curriculum, Statistical
Publishing House, Hanoi;
6. Le Cong Hoan (2010), Construction management, National Economics
University Publishing House.
