The value of every commercially occupied asset reduces over time. The floors get worn, the heating system starts functioning inefficiently, electrical systems become old, and the facilities need improvement. It is normal for assets to depreciate, but not to deteriorate at an accelerated pace.
Most organisations tend to concentrate more on the cost of construction of the asset but neglect the state in which the asset remains. This leads to reactive maintenance and ultimately high costs in repairs and reduced value of the asset faster than anticipated.
We at Innovel believe that in order to calculate asset depreciation, the facility’s management is key, besides using accounting.
Asset Depreciation Is More Than an Accounting Entry
Depreciation is something that is reflected in accounting statements, but it also lies in the condition of the structure.
Not only does bad maintenance result in the need for repairs, but the machine uses more energy, is constantly breaking down, and ends up having to be replaced well ahead of schedule.
There are hundreds of pieces of equipment that have an impact on commercial building performance. Heating, cooling systems, electric control panels, pipes and plumbing, lifts, light fixtures, and other equipment add to the value of the property.
Here at Innovel, we can help you preserve this equipment by maintaining it.
Deferred Maintenance Accelerates Asset Loss
Organisations defer maintenance in order to lower their operational costs in the short term.
However, deferred maintenance normally leads to higher costs down the road.
Over time, a poorly maintained air conditioner could lead to higher energy bills prior to its failure. Leaking pipes may damage the walls and floors. Unaddressed electrical problems may have an impact on connected machinery.
The more delays there are, the higher the real cost of ownership becomes.
That is why Innovel recommends preventative maintenance to avoid major capital expenses in the future.
Facility Management Protects Long-Term Value
Maintenance of commercial buildings is enhanced by following a schedule for performing maintenance activities.
Regular inspection, servicing of equipment, compliance verification, and performance testing enables facility management to ensure consistent maintenance of the assets during the entire life cycle of the assets.
As explained in our previous blogs about preventive maintenance scheduling, HVAC systems, and energy audits, maintenance activities increase efficiency and also extend the life of the equipment.
Here at Innovel, we integrate all these into one maintenance schedule through our integrated facilities services programme.
Asset Performance Should Be Measured Regularly
Companies typically conduct their financial performance review monthly; however, assessing the condition of assets could take place over years.
Inspection of assets is helpful in determining their current state, previous maintenance, time needed for replacement, and efficiency of operation.
In contrast to reacting to breakdowns, companies can upgrade their assets slowly, easing the financial burden and ensuring the continuous functioning of business.
Our firm will assist you in keeping an eye on building systems for the sake of making informed maintenance decisions.
Facility Management Supports Better Investment Decisions
If commercial property is well maintained, budgeting is easier.
The companies can plan the replacement of equipment, estimate the cost of maintenance work, and save from unplanned investments.
This will also result in better tenant relations, building operation, and efficiency.
No matter if the company owns offices, industrial facilities, shops, or corporate campuses, good commercial facility management will guarantee not only daily operation but also protection of the investment value.
Innovel is a provider of facility management services in Kolkata and develops maintenance programmes for the customers.
Avoiding the Depreciation Trap
Buildings don’t remain in pristine condition forever.
Nevertheless, fast asset depreciation is usually caused by poorly maintained equipment and machinery, not by natural ageing of buildings.
Regular check-ups, quick repairs, energy-saving operation, and lifecycle thinking all reduce the speed at which assets depreciate.
Innovel believes that facilities need to be treated as business assets, not just sources of maintenance costs. Proper facility management will provide not only continuity of business operations but also financial stability of commercial real estate for many years to come.
Looking Ahead
Commercial buildings are always huge investments.
To preserve the investment, mere repairs are not enough.
Innovel will guide companies to calculate asset depreciation based on operations through the maintenance level, performance of equipment, and lifecycle of the equipment. Businesses will be able to cut down unnecessary asset depreciation and gain efficiency from the commercial buildings.
FAQs
- What is asset depreciation in commercial buildings?
Asset depreciation can be described as the process by which the building components and equipment depreciate with time.
- Can asset depreciation be avoided by performing maintenance?
Yes, asset depreciation can be prevented through maintenance measures.
- What is the function of facility management in commercial buildings?
The role of facility management in commercial buildings includes making sure that all building systems work well and prevent any depreciation in building assets.
- What building assets are to be maintained?
Building assets including HVAC systems, electricity, plumbing, elevators, fire safety system, lighting and interior infrastructure require maintenance.
- How often should asset inspection be done?
The asset inspection differs for different building assets and the critical assets have regular inspections through the maintenance program.
