What Is an Asset Condition Assessment?
An asset condition assessment is a report outlining how an organization can manage capital assets 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 used to decide upon preventative maintenance or remedial work to preserve an object's value and extend its useful life.
Some refer to an asset condition assessment as a "facility condition assessment" when it pertains to a building.
- An asset condition assessment (ACA) outlines how a company can improve its asset management operations by efficiently managing its capital assets.
- Companies use asset condition assessments to decide upon preventative maintenance or remedial work to preserve an object's value and extend its useful life.
- Asset condition assessments involve monitoring or inspecting assets and analyzing the collected data to determine the condition of each asset.
- The first of two types of inspections involves determining whether an asset has defects or presents a hazard.
- The other type of inspection determines how much useful life of the asset remains.
How an Asset Condition Assessment Works
Large organizations, especially those with physical assets, often manage large numbers of assets that are in various stages of their lifecycle. Understanding the condition of those assets over time is critical to the organization since understanding whether an asset needs to be retired soon helps the organization budget for that eventuality. For example, a transit agency that monitors the health of its rolling stock of cars and locomotives can plan for the retiring of that equipment at the end of their lifecycle.
Requirements for an Asset Condition Assessment
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 to ensure that the asset meets the expected useful life.
Companies use the asset condition inspection component of the asset condition assessment to determine whether an asset is in good or bad shape and what steps, if any, are required to improve or repair the asset. There are two types of inspections:
- The first type of inspection 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 often that Type 2 assessments; though the frequency of either type of inspection depends on the value, usefulness, and type of object 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. Purchased assets are given an estimated useful life, which, when combined with estimated maintenance costs, allows the organization to estimate how much it will cost to replace the asset in the future.