IT Asset Disposal
What is “IT Asset Disposal”? How does it relate to IT Asset Management? How do you make it work together? This article will help you gain a greater understanding of what IT Asset Disposal is, how it relates to IT Asset Management and how you can use both in your business.
What is IT Asset Disposal (ITAD)
IT asset disposal (sometimes referred to as ITAD) refers to the recycling or disposal of old or obsolete computers, computer parts, computer peripherals, telephones and other electronic pieces of equipment that has been removed from regular use and no longer needed by the company or office that once used them. Common types of assets include current, non-current, physical, intangible, operating, and non-operating machine.
IT Asset Disposal is the gathering, evaluation and relocating of IT equipment that no longer needs to be used by the organization. IT Asset Disposal is a vital need for many enterprise online and offline. The overall concept for accounting for asset disposals is to reverse both the recorded cost of the fixed asset and the corresponding amount of accumulated depreciation. IT asset disposal method is updating the IT equipment inventory with details of the disposition and reconciling the accounting records.
How does IT Asset Management relate to IT Disposal of Assets?
IT Asset Management (IAM) is an area of interest that focuses on the storage, protection, access and management of any information technology assets in an organization’s infrastructure/ IT system making it easier to access by its users or authorized persons with sufficient clearance levels within the organizations. IAM is the most efficient way of organizing and managing the assets of an organization, whether it be hardware IT Assets or software IT Assets.
IT Asset Management is beneficial to all companies from small to large because it saves money and increases efficiency.
IT Asset Management Helping to save the organization money and improve efficiency by reducing costs, IT Asset Management is making business more efficient in today’s rapidly changing technology market. A sound IT Asset Management program should focus on the value of all IT Assets. However, the overall depreciation is calculated by deducting the salvage value from the overall market value. When companies sell this equipment it gains a salvage value or residual value which can be a gain or loss per the books. Depreciation expense is used to reduce the value of the plant, machinery, factory, property, and equipment to match its use and wear and tear, over time. The gain or loss should be reported as a gain or loss for disposal assets accounting on the income statement. The loss reduces income, while the gain increases it.
How do you make IT Asset Management and IT Asset Disposal work together?
IT Asset Disposal is directly related to IT Asset Management, because of how the two work alongside each other, it is important for the asset disposals process to take place at the same time as in conjunction with a major changeover or upgrade of all IT assets (hardware) and programs within a company from one system to another system in categories. Making it a real time saver for the company and so many other companies on the market today. Asset disposal is the act of selling an asset account usually a long term asset that has been depreciated over its useful life-like production equipment. Note that these products only have a useful life of five years.
IT Asset Disposal is an important section of IT Asset Management that should also be considered part of it to ensure the efficiency of your firm. By focusing a concept on how to use both processes together within your company, you can save money and time, as well as increasing efficiency and productivity in the long-term, as a result making your company’s return on investment (ROI) greater than ever before. So, asset tracking programs makes sure the accounting and evaluation of assets done accurately.
IT Asset Disposition, or ITAD, is the method of divesting an organization’s old hardware, programs and other electronic machine assets from its operational environment, while making sure that the organization’s sensitive information contained in those IT apparatus are completely and irreversibly wiped clean.
ITAD is an essential component of IT Asset Management (ITAM) since it is a primary component in the ISO/IEC20000:2011 Information Technology Infrastructure Library (ITIL) Information Life Cycle.
The purpose of IT Asset Disposition, or ITAD, is to ensure that organizations do not become victims of fraud through the sale or donation of sensitive information contained in older hardware and software disposal IT apparatus. The threat from such activity can be high since old machine hardware and software are valuable commodities on the global market. When the sale takes place, a journal entry is recorded that (1) updates depreciation expense. Depreciation expense is reported on the income statement as a reduction to income. The accounting records will need to adjust depreciation and the fixed assets register and record any financial transaction made as a portion of the disposal procedure. You should use Ledger Entry (LEN) to manually post any sales proceeds.
ITAD is managed on a firm-wide or company-wide level, and resources may be dedicated to the task, such as an IT Asset Disposition team. It is important that the ITAD team understands what information security measures must be taken in order to protect the organization’s sensitive information from being extracted from older hardware and programs disposal assets records, which would represent adversaries’ greatest risk.
IT Asset Disposition, or ITAD, occurs in two phases:
The first thing that needs to be done is to establish a complete inventory of company assets and their current location. This consists of identifying the hardware and program assets that nobody is currently using, but which can still contain sensitive information. This will generally be done through software asset management (SAM) tools that are available from third-party machinery providers. The second thing to do is to make sure that all those old IT apparatus are destroyed by a certified service provider after the data on them has been completely and irreversibly erased. This can affect taxable income & resale value.
The way of ITAD is monitored through the use of internal and external controls, which is a part of the Information Life Cycle. Internal controls are used by an organization to make sure that all ITAD tasks are completed in accordance with its established policies and procedures. External controls are used by a third party service provider to help an organization verify that all required services have been performed.
IT Asset Disposition, or ITAD, can be extremely beneficial for all organizations since it secures firms from becoming victims of fraud through the sale or donation of sensitive information contained in older hardware and program assets. It can also help corporations avoid the cost of continually replacing hardware and program apparatus since the hardware and program sale will be donated to other organizations that require them to the revenue it gain. The sale proceeds posting does not require to contain an asset marker. The proceeds received on the asset sale are compared to the asset’s book value to determine if a gain or loss on asset disposals has been realized. The sale price would depend on the physical state of the asset on the level of service it has provided. The gain or loss is the difference between the proceeds received and the book value of the disposed of apparatus, updated for current depreciation expense.
When an organization determines that an asset is no longer in use, it has to be disposed of in a way that ensures that all the data on it will be completely and irreversibly wiped clean. This is necessary since older hardware and program apparatus are valuable commodities for information criminals who are looking for older apparatus in which they can extract sensitive information after it has been wiped from newer assets disposal.
This article focuses on the logistics and security of managing IT Assets (computers, cell phones, PDAs, etc) or another machine when they are no longer needed by an organization.
Each year, corporations dispose of millions of computers as their business needs change Sometimes it’s because new hardware is purchased Other times it’s because a project team completes its work or a firm downsizes its workforce All this activity creates a huge challenge:
How can businesses effectively and securely manage the disposal of their used IT assets?
This is a procedure that needs to be managed Today’s typical corporation or organization has hundreds and sometimes thousands of IT apparatus—all of which have value that must be accounted for if the establishment wants to continue doing work ethically and legally The low-cost alternative—dumping used computers in landfills—can lead to fines or even criminal charges against the company and executives when regulators discover that used machine was not disposed of properly Depending on where your firm is located, this activity is considered environmentally unfriendly or even illegal.
IT asset disposition (ITAD) is the method by which hardware and other IT assets are managed from end-of-life (EOL) until they are either resold, refurbished, or disposed of properly. The increase in the accumulated depreciation account reduces the asset account to its current book value by generating transactions. It is the last stage of the asset life cycle. Gain or loss from the selling of assets compare to the netbooks amount value are charged to the income statement. Disposed IT apparatus should be removed from financial statements and also from recent posts listing accordingly. These statements are key to both financial modeling and accounting. There are situations in which the need for disposal isn’t as obvious.
ITAD encompasses all the steps needed to dispose of IT assets and includes proper data removal, secure destruction and environmental recycling. There are many factors to be concerned about before asset disposal. The disposal of assets involves eliminating IT apparatus from the accounting records. Here are the options for accounting for the disposal of assets: No proceeds, fully depreciated. The asset received is recorded on the balance sheet at the book value of the asset given up plus any debit cash paid. This is recorded balances are needed to completely remove all traces of an asset from the balance sheet (known as derecognition) and the statement of cash flows. Balance sheet is one of the three fundamental financial statements. Debit cash for the amount received, debit all accumulated depreciation, debit the loss on asset sale account, and credit the fixed asset. The entry to remove the asset and its contra account off the balance sheet involves decreasing (crediting) the asset’s account by its cost.
This is a very complex method that requires continuous vigilance if you want to do it right One slip up can lead to fines or other civil penalties being assessed against your work and possible criminal charges for firm executives The good news is that if you follow the established ITAD procedures, it’s easy to do right—but hard to do wrong.
IT asset disposition (ITAD) and electronics recycling services
Prime Asset Recovery is a national leader in the disposal of high-tech assets. It purchases, sells and shreds computers, computer components and computer peripherals for businesses across a wide range of industries from coast to coast. It provides on-site recycling services and hard drive data destruction.
We offer a wide variety of IT asset disposition (ITAD) and electronics recycling services ranging from data destruction and asset recovery to decommissioning and tailored solutions
Prime Asset Recovery is an IT services company for the public sector, helping companies and public organizations to do more, for less. Prime Asser Recovery delivers efficient IT solutions to support public sector transformation. With over 10 years’ experience in serving multiple clients, we provide consultation and managed services, from consulting to implementation and support.
“As a provider of IT services to the public sector for over ten years, we have seen the industry evolve and challenge through various issues prevalent in companies. One major issue is around technology obsolescence due to continuous change in technology. This challenges our customers’ ability to deliver on key priorities as they are unable to rationalize their current IT infrastructure while at the same time are challenged by costs associated with maintaining legacy equipment.”
To address these challenges we have developed new approaches including asset disposition services that assist our customers in more effectively managing their technology assets and investments.
We also offer e-waste disposal solutions as part of our recycling portfolio. We bring a holistic view of life-cycle management of IT assets from procurement through disposal. This approach enables the customer to be in control of their IT assets throughout their life cycle, from start to finish.
Our services portfolio targets both new and existing end-users, demonstrating the value proposition and operational capabilities. In addition to helping companies address a key strategic priority in protecting the assets required for future investment and transformation, we help companies on their journey to scaling their operations.
The expanding waste management industry is faced with the need for increased capacity to deal with growing volumes of waste. This has led to an increase in the number of countries taking on responsibility for waste management from local government authorities. The global market for e-waste disposal services is forecasted by Waste Management World magazine (WMW) at $9.6 billion in 2015, which is forecasted to grow by 8 percent annually until 2020 when it will reach $12.3 billion. By 2025 e-waste disposal services will account for around 40% of all global electronic waste (e-waste) markets.
E-waste management is a growing concern because the volume of electronic waste is rising, and the toxicity of materials used in electronic products (e.g. lead, mercury, arsenic, cadmium and brominated flame retardants) is increasing.”
Prime Asser Recovery provides waste management and recycling services globally. We servicing commercial customers as well as municipalities.
Our core competencies lie in technical expertise for IT asset disposition, specialty data destruction and asset recovery services ranging from hard disk drives to mainframes.
IT Asset Disposition (ITAD) deals with obsolete technology assets that cannot be reused or recycled. It involves transferring computer equipment, software, peripherals and furniture to another party for appropriate reuse or disposal. A portion of this equipment may still be functional; therefore it must be checked for potential business value before being transferred out of service to a third party vendor.
Prime Asser Recovery operates a large global fleet of vehicles with specialized loading capabilities to transfer hardware from customer sites to our secure data centers located around the world. e-Waste is collected, shipped and safely and securely disposed of in authorized facilities.
It contains a proven design to provide the conditions necessary to eliminate all evidence of any information that was once contained on equipment and digital media.
“This facility is also used for data destruction, migration and integration of new technology, including desktop and server hardware and applications. It provides an efficient method for offloading legacy hardware to a secure location while preserving your data by developing a solid image of the entire system. In addition, Prime Asser Recovery’s data center provide full spectrum disaster recovery services covering all the planning phases from emergency disaster prevention through mitigation, protection, restoration/recovery, business continuity management (BCM) and post deployment support.