What is an Asset Condition Assessment
An asset condition assessment is a report outlining how an organization can manage capital assets in order to improve its asset management operations. An asset condition assessment (ACA) is most commonly associated with organizations that manage physical assets, such as bridges, roads, and equipment, and is utilized to decide upon preventative maintenance or remedial work to preserve an object's value and extend its useful life. Asset condition assessment may also be referred to as a "facility condition assessment" when it pertains to a building.
Breaking Down Asset Condition Assessment
Large organizations, especially those with physical assets, often have to manage large numbers of assets that are in various stages of their lifecycle. Being able to understand the condition of those assets over time is critical to the organization, since understanding whether an asset needs to be retired in the near future helps the organization budget for that eventuality. For example, a transit agency that monitors the health of its rolling stock of cars and locomotives will be able to plan for the retiring of that equipment at the end of their lifecycle.
Asset Condition Assessment in Use
Asset condition assessments involve monitoring assets periodically, and using the data collected from those inspections to determine the condition of each asset. The analysis of inspection data may show that an asset needs preventative maintenance in order to ensure that the asset meets the expected useful life.
The asset condition inspection component of the asset condition assessment is used to determine whether an asset is in good or bad shape, and is used to determine what steps, if any, are required in order to improve or repair the asset. There are two types of inspections:
- The first type determines whether an asset has defects or if it presents a hazard, and is meant to determine whether the asset needs to be repaired. Such inspections tend to be carried out more frequently that Type 2 assessments, though the frequency of either type of inspection depends on the value, usefulness, and type of object being assessed.
- The second is a far more exhaustive asset condition assessment that is used to determine how much useful life the asset has left. The inspection results feed into the overall asset condition assessment.
Asset condition assessments help an organization plan its capital maintenance and renewal budgets. When assets are purchased they are given an estimated useful life, which, when combined with estimated maintenance costs, allow the organization to estimate how much it will cost to replace the asset in the future.