Fixed asset integrity in MENAT - a comprehensive guide to IFRS compliance

Introduction

Did you know? Asset misappropriation schemes account for 87% of corporate fraud schemes, as reported by ACFE.

In today’s era of globalisation and interconnectivity, an increasing number of companies are extending the geographical scope of their operations in the Middle East,Africa, and Turkey. Expansion inevitably leads to the acquisition of more equipment, machinery, and facilities—in short, more fixed assets. As businesses grow internationally, stricter asset reporting rules and standards become necessary for their success, productivity, and the well-being of society. Creating reports and forecasts can be complex and challenging, especially without the right tools. By using proper fixed asset management procedures, companies in the Middle East, Africa, and Turkey can avoid fines and prevent misappropriation.

Navigating legal compliance challenges in MENAT

This guide aims to help you gain a thorough understanding of the most crucial international rules and standards of fixed asset reporting, and how integrated fixed asset management solutions can assist you in maintaining compliance. It will also elucidate the best practices for calculating fixed asset depreciation and introduce you to region-specific regulations, enabling your company and financial teams to expertly learn how to:

• Effortlessly pass fixed asset audits
• Maximise your productivity through standardisation
• Fully comprehend the specifics and importance of IFRS, ISO, and IPSAS

About Iron Mountain fixed asset management

At Iron Mountain Incorporated (NYSE: IRM), we strive to give our customers end-to-end solutions—the people, processes and technologies—that streamline fixed asset verification. We work with our partners to help them become true industry leaders in efficient and automated asset accounting in ways that are sustainable, compliant, and competitive.

Proper fixed asset management can help your business cut costs, improve future planning, decision-making, as well as eliminate headaches from audits and regulatory pressures.

Why fixed asset management is vital to success

Importance of fixed asset management solutions

In the Middle East, North Africa, and Turkey (MENAT) region, fixed assets represent a considerable portion of capital investments. Globally, fixed assets account for 35-50% of total assets when looking at Fortune 500 companies.

MENAT has witnessed impressive growth since the 2008-2009 financial crisis, particularly in the Gulf Cooperation Council (GCC) countries. With an average real GDP growth rate of 5.2% from 2010 to 2014 and a strong performance in subsequent years, the MENAT region’s economy offers vast opportunities for businesses.

In 2022, the value of fixed assets in MENAT reached USD 64.27 billion and is projected to grow at a robust CAGR of 8.13% through 2027.

Big opportunities: how companies can save big with fixed asset management

Investing in fixed asset management (FAM) solutions can yield significant benefits for businesses, as evidenced by A.T. Kearney’s survey of 558 companies. Companies that implemented integrated FAM solutions reported:

• 28.3% increase in maintenance productivity
• 20.1% decrease in equipment downtime
• 19.4% savings in material costs
• 17.8% reduction in maintenance costs

Revenue opportunities

Fixed assets often represent a considerable investment for many companies and serve as a primary source of revenue. As a result, optimising fixed asset management to maximise the revenue generated is vital for business success. Effective fixed asset management can reduce overall operational costs and mitigate the risk of accidents and miscalculations. For large organisations, addressing these concerns can safeguard revenue and ensure compliant and sustainable operations.

Effective management of your assets opens up an arsenal of opportunities, allowing your business to:

• Maximise asset utilisation and lifespan
• Minimise assets’ downtime and maintenance costs
• Ensure accurate financial reporting and overall regulatory compliance
• Optimise capital budgeting and planning
• Improve operational efficiency and productivity

Enterprise benefits

Integrated fixed asset management solutions, powered by a combination of digital and traditional tools, encompass and interact with every stage of business. This ensures that you can leverage both accounting and operational benefits:

• Ensure quick, centralised access to asset-related information to facilitate decision-making
• Maintain a sustainable and compliant overall operational cycle
• Keep a comprehensive asset record, including warranty information, maintenance manuals, schedules, and service history
• Track the location of fixed assets to ensure proper oversight and protect against theft
• Monitor physical equipment to minimise downtime
• Oversee assets across multiple locations for streamlined operations
• Reduce maintenance costs
• Improve overall productivity
• Keep an up-to-date record of assets that are no longer in use
• Streamline employee performance