Chapter 27 Furniture, Fixtures, and Equipment.ppt

* * Chapter 27Furniture, Fixtures, and Equipment FFE FFE as Capital Items Capital items are long-life items. Most capital items are depreciable assets Typically, the cost of many FFE items cannot be used as tax deductions in the year they were purchased. Value is depreciated over a period of years Management Considerations Effect of future plans might have on the need for FFE Obsolescence Capitalizing an operating expense Operational savings Persons involved User(s) Owner-manager(s) Buyer(s) Consultant(s) General Procedures in FFE Purchasing Is replacement necessary? Visiting trade shows Financing and the need to obtain competitive bids The FFE Specification Similar in scope to other specifications Supplier services are very important Instructions to bidders General conditions Specific conditions Detailed drawings Selection Factors Intended use Exact name Lifetime cost Potential operating savings Direct purchase Demonstration models Equipment programs Custom FFE New vs. used Selection Factors, Cont. Versatility Compactness Compatibility Appearance Brand name Portability Ease of cleaning Ease of maintenance Degree of automation Availability of replacement parts Selection Factors, Cont. Supplier services Employee attitude and skill level Energy source Excess capacity Add-on capabilities Warranty Code compliance The Purchase of FFE Cash Installment Credit Copyright ?2008 John Wiley Sons, Inc. Added Slide, EGM * * * Added Slide, EGM *