Gauging fixed assets before buying corporate stock
June 11, 2012
For those thinking of buying a business, taking advantage of a sale of corporate stock is a way to immediately seize control of a company's assets. However, before buying stock, it's important to conduct a fixed asset
inspection, review all the items listed on the balance sheet and check listed depreciation
schedules, warns the Savannah Morning News.
"A walk through the premises will determine what condition (fixed assets
) are in and whether they exist or not," writes certified financial examiner and licensed public accountant Edward Loughrey for the news source. "Is the building part of the corporate assets? What condition does it appear to be in? What is being sold or being retained?"
For instance, determine whether any vehicles will be included and if the purchase of any special equipment will be necessary. Also, take a look at the inventory control systems in place, as the amount of inventory on the books was factored into the calculation of the sale price.
After purchasing a business, it's important to establish a fixed asset management
system immediately to avoid the books falling into disarray. A fixed asset software
solution can automate much of this process.