Faculty of business department of accounting an assessment of fixed asset managementin the

2.12 Management of Asset Disposal
When thinking about asset disposal management, it has to originate at the early stage where an 
organization plan to purchase an asset, as per Ellarm (1995; 4) “In addition to the price paid for 
the item, Total cost of ownership may include such elements as order placement, research and 
qualification of suppliers, transportation, receiving, inspection rejection replacement, down time 
caused by failure disposal costs and so on.”
As per,Spire (1996; 99) the management of the asset lifecycle starting form acquisition through 
maintained life to disposal, is a very important issue. This indicates that asset management 
includes a description of existing assets, maintenance plans, asset disposal strategy and asset 
management improvement strategy and it is the most important aspect for the success of a 
company (Avis and Dent 2004, 11) explain about the two principal elements in relation to 
management of organization’s surplus property. “The process which the property is identified 
and declared surplus and the second is the procedure for managing such property effectively until 
disposal finally takes place.
When determining assets for disposal, managers should be aware that the useful life of the asset 
should be determined, authorized person responsible for determining assets for disposal action, 
and is accountable for all decisions they take in the disposal process including but not limited to 
the costs of replacement as a result of disposal activities being taken in to account and fair 
dealing and openness, special attention assignment should be given based on the size and 
complexity of the company (Zenz, 1994 ; 521).
Some very legitimate reasons for assigning disposal of materials to the purchasing materials 
management function include; (1) Knowledge of probable prices trend, (2) contact with sales 
people is a good source of information as to possible users of the material, (3) familiarity with 
the company’s own needs may suggest possible use for, and transfer of, the material within the 
organization, and (4) unless a specific department established with in the firm to handle this 
function purchasing is probable the only logical choice. “The purchasing department is in a 
better position to know about materials, materials markets and current economic market 
conditions of disposable assets, and as per (Wasting, 1979:25).Agency management is 
responsible for reviewing disposal reports, evaluating causes and trends leading to disposal, and
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implementing procedures to manage and control disposal when the dispositions represent 
problems, inefficiencies, and the occurrence of unnecessary cost.