Asset Valuation
Introduction
The intent of this paper is to describe to the CEO Team B’s recommendation for reporting and valuing assets. Included in this paper is a synopsis of the company’s business plan and the related inventory control and capitalization policy. The authors’ of this paper will also justify why each policy was chosen and evaluate how the policies assists our business to meet its goals. Finally, alternative methods will be discussed with regard to why they were not chosen.
Type of Business
Practice Team B intends to do business as a provider of Durable Medical equipment (DME) and prosthetics, orthotics, and supplies (POS). Team B chose this merchandise to sell retail as Medicare Part B covers a wide range of DME for use in the home, including oxygen equipment and supplies, hospital beds, wheelchairs, walkers, and renal dialysis machines. The coverage for POS, in both home and nursing home settings, includes enteral (tube feedings) nutrition therapy, urological supplies, surgical dressings, and devices such as hand braces and artificial limbs. DMEPOS benefits are especially important to the sick and disabled Medicare beneficiaries. This allows them to avoid institutionalization, and live more mobile and independent lives. Usage of such equipment helps this population to be maintainers of a high quality of life, (Hoerger, Finkelstein, & Bernard. Fall 2001).
Effective management and control of assets should be a company wide initiative. Our goal is to minimize capital tied up in uncollectible invoices, obsolete inventory, and vacant building space. Our intent is to have an asset management control system that is flexible and able to respond to market demands, (Lindo. Jan 2008.). Rapid growth in sales often leads to large increases in accounts receivables and inventories, or conversely, a sharp decline in demand can leave an organization