While asset recovery, resource recovery, or investment recovery are terms the process manufacturing industry understands, Federal Equipment Company’s Resource Recovery program is much more than merely extracting any possible value from surplus equipment.
Instead, we look at asset recovery through the lens of asset and capital investment management, helping our partners to maximize their capital investments and, when needed, serve as on-call sourcing agents to quickly fulfill equipment needs—even emergency needs.
Asset recovery, also referred to as investment or resource recovery, is the process of maximizing the value of unused or end-of-life assets through effective reuse or divestment. While sometimes referred to in the context of a company undergoing liquidation, Asset recovery can also describe the process of liquidating excess inventory, refurbished items, and equipment returned at the end of a lease. Asset recovery has three main elements—identification, redeployment, and divestment. Specialized asset recovery software may assist any of these steps.
Identification: Unproductive assets cost money, and it is important to classify them as such by investment recovery personnel. Later, a decision can be made whether to redeploy or divest. Surplus assets could be in any form, including fixed equipment, mobile equipment, buildings, or land. Idle or surplus assets can be either capital assets or non-capital surplus. Redeployment: Redeploying an idle asset to another part of an organization is often the most productive use for the asset. Asset redeployment also saves the organization money by eliminating the need to purchase a new asset at current market rates. For effective reuse, another part of the company needs to require an asset of that kind. It must also be practical to transfer and deploy the asset at the new location. One form of internal redeployment is cannibalization of usable spare parts from one asset to another. Disposition: Disposition of surplus or idle assets is the process of either selling, scrapping, recycling, donating, or disposing an asset. The process involves removing the asset from an organization’s books. When this is done effectively, the organization obtains capital that can be placed back into the business. In addition, a good asset sale produces revenue and boosts profits. Donations also build goodwill and deliver tax benefits. The type of disposition method employed will depend on the type of asset, its fair value, and market demand.
