What is the difference between an Asset Management Plan and a Capital Plan?



These two subjects are related to each other, but there is a key difference – one is a process, the other is a financial tool.

Asset Management Planning is the systematic process of developing, operating, maintaining, upgrading and disposing of tangible assets (physical objects such as buildings or equipment) that a group or entity is responsible for. It is organized in the most cost-effective manner to include all expenses, risks and performance attributes over their whole life-cycles.

A Capital Plan is a financial tool. It is a budget cash-flow projection of the cost expenditures and expected timing for the replacement and significant renewal/refurbishment of physical objects, such as buildings or equipment (including site assets). The projection in your plan is often a result of a building/facility condition assessment report that provides a 10 year and 25+ year financial projection.

Not to be confused; determining the condition of assets, when they need to be replaced or refurbished, and for how much is part of asset management planning.

#asktheexpert #assetmanagement #capitalplan




Written by:

Robb Dods, Facility Manager Instructor

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