Furniture, Fixtures, and Equipment

Furniture, Fixtures, and Equipment27YOU SHOULD BE ABLE TO:Identify management considerations surrounding the selection and procurement of furniture, fixtures and equipment.Outline the general procedures used when purchasing furniture, fixtures, and equipment.YOU SHOULD BE ABLE TO (CON.):Describe the major selection factors for furniture, fixtures, and equipment.Evaluate financing options when purchasing furniture, fixtures, and equipment.FFE AS CAPITAL ITEMSCapital 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 CONSIDERATIONSEffect future plans might have on the need for FFEObsolescenceCapitalizing an operating expenseGENERAL PROCEDURES IN FFE PURCHASINGIs replacement necessary?Visiting trade showsFinancing and the need to obtain competitive bidsTHE FFE SPECIFICATIONSimilar in scope to other specificationsSupplier services are very importantInstructions to biddersGeneral conditionsSpecific conditionsDetailed drawingsSELECTION FACTORSIntended useExact nameLifetime costPotential operating savingsDirect purchaseDemonstration modelsEquipment programsCustom FFENew vs. usedSELECTION FACTORS (CONT.)VersatilityCompactnessCompatibilityAppearanceBrand namePortabilityEase of cleaningEase of maintenanceDegree of automationAvailability of replacement partsSELECTION FACTORS (CONT.)Supplier servicesEmployee attitude and skill levelEnergy sourceExcess capacityAdd-on capabilitiesWarrantyCode complianceTHE PURCHASE OF FFECashInstallment Credit