SOUTHWARK COUNCIL SELECTS ASSET4000 FROM RAM TO MANAGE ASSET BASE WORTH £3.4bn

- London’s largest social landlord and community services provider selects RAM’s asset management solution to assist with component accounting -

19th April 2011: Southwark Council, a local authority and London’s largest social landlord, has selected Asset4000 from Real Asset Management (RAM) to control and report on its £3.4bn worth of assets. The solution will provide the Council with an IFRS-compliant, centralised asset register with the hierarchical detail required by component accounting and a range of reporting functionality which will help the Council save time and increase process transparency.

Southwark is one of the largest boroughs in London, and the Council provides a wide range of services to the community, including social housing, schools, parks, leisure centres and social care. It is also currently in the midst of some of the largest regeneration projects in the country and has a thriving tourism and night time economy given its prime position by the river Thames, in the heart of central London. It is also home to The Shard which, when completed in 2012, will be the tallest building in the EU and is a sign of the borough's growing importance as a commercial centre.

Southwark Council’s asset register totals 42,000 records and is valued at £3.4billion, of which 40,000 records and £2.5billion pertains to the Council’s substantial housing stock.

With the significant number of dwellings on the asset register and the upcoming component accounting requirements as dictated by IFRS, Southwark Council found itself in a position where investment in an asset management software package became crucial. Dennis Callaghan, Chief Accountant at Southwark Council, explains, “The complexity of having to adopt IFRS accounting processes means that we require a tool which allows us to manage our assets at a more detailed level than we have before, with greater flexibility.”

Callaghan continues, “Component accounting involves identifying each asset and recognising where parts of an asset depreciate differently. IFRS allows us to adopt this incrementally, but at the very least we have to identify land and buildings separately. So, if we have 40,000 assets on the register at present, we would then have 80,000. Further to this we may have to identify roofs, lifts and othercomponents within the property. We suddenly go from having 40,000 records to a much larger database.”

For Southwark Council, these requirements dictated a need to invest in a software package specifically designed to take on complex depreciation calculations at component level. Callaghan adds, “We needed a system with the capacity to allow for the required levels of differentiation, and to provide us with the tools to get the information back out of the system efficiently.”

Describing the benefits that the Asset4000 solution will deliver to Southwark Council, Callaghan states, “The system will provide us with higher quality reports on the value of our fixed assets, which will help to identify easily the level of componentisation, as well as increasing transparency in the calculation of our depreciation charges. The solution will also offer increased accuracy on generating accounting transactions within our financial system, SAP, to which it links, as well as reporting on values in the database – features that other packages lack.”

Callaghan adds, “We have seen in RAM the tools which allow us to apply the necessary accounting policies and practices relevant to the different parts of our asset portfolio. In particular, the interface is very user-friendly and enables us to manipulate and process the data in an effective way. This affords us a great deal of flexibility and allows us to build a format which extracts data to match our specific requirements.”

The Asset4000 system is designed to assist with IFRS compliance for local government bodies, with features including generation of revaluation reserve entries, calculation of historic and revaluation depreciation, maintenance of audit trail records on historic impairment and component valuations and accounting.

Southwark Council aims to process 2010/11 year-end accounts on the new system. Callaghan comments, “The RAM system will undoubtedly improve our ability to load data in a more efficient manner, particularly at year end. The reporting functionality provided by Asset4000 will provide us with a higher level of transparency and accuracy, which is of course vital for auditable year end accounts. Time savings will also be a particular benefit, as loading data on 40,000 asset records – a total which will increase due to component accounting – requires a lot of data manipulation. The RAM solution will certainly help us to approach this in a more efficient manner.”

For further information, please contact:
Karen Conneely (Marketing manager)   
Real Asset Management   
Tel: +44 (0)1689 892100   
Email : solution@realassetmgt.co.uk