ValuD: Can you perform condition-based maintenance with TRIRIGA?

Applying condition-based maintenance with IBM TRIRIGA helps to assess a facility’s or an asset’s performance, capture its lifecycle costs, and to identify necessary repairs and replacements. An integrated set of performance metrics of a facility’s condition is needed to predict when to repurpose, or renovate structures.

Building operations and maintenance managers are primarily responsible for assessing the condition of building components like roofs, air conditioning, walls, electrical, and communications. Forecasting facility conditions and predicting repairs before failure occurs, results in cost reduction. IBM TRIRIGA automates demand and preventive maintenance services to reduce the cost of maintenance operations.

TRIRIGA’s facilities and operations manager is an intense CMMS that enables organizations to manage their building assets and facilities over their lifecycle in order to reduce maintenance expenses. It provides condition-based facility assessments that help you to prioritize the areas for capital improvement and assists you in extending the life of your facilities and facility assets.

Condition-based maintenance features of IBM TRIRIGA

  • Improves the value and environmental performance of facility assets through the capture and classification of facility, building system and asset deficiencies…
  • Evaluates the required investment, energy and operating cost savings, and return on investment of each opportunity…
  • Automates the generation of work requests and capital projects to manage the remediation of deficiencies or implementation of environmental opportunities…

[Admin: This post is related to the 03.30.15 post about facility condition assessments (FCA). To see other related posts, use the ValuD tag.]

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What is the difference between “SL Asset Value” and “Asset Value”?

If you look at the query “triFiscalLineItem – Display – Likely Term Type B – Associated To Current Record” in TRIRIGA 10.5.2, it is based on the [triCostItem] triFiscalLineItem BO and the [triCostItem] triLeaseFiscalLineItem form.

However, the report uses the triSLAssetValueNU (straight line) field for asset value (for Operating leases), while the form uses the triAssetValueNU field for asset value (for Capital/Finance leases). Which is correct? Shouldn’t both of these values be working from the same field? Or is one field calculated based on the other?

Both of these fields represent asset value for the new accounting standards (FASB ASC 842). The asset value for Operating or Finance is dependent on depreciation (amortization which is calculated differently for Operating and Finance classifications.) Hence, they are represented by 2 different asset value fields:

  • The triSLAssetValueNU field is used to store the value for Operating leases. (The field for Operating is represented with “SL” or straight-line.)
  • The triAssetValueNU field is used to store the value for Finance leases. (Small Correction: The term “Capital” is not applicable in ASC 842 guidelines.)

[Admin: To see other related posts, use the Straight Line tag or ASC tag.]

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IV96316: Initial liability carryover balance is not applied

For TRIRIGA 10.5.2/3.5.2 OOB, there is an issue with the “Initial Liability Carryover” (ILC) field. In both operating leases and capital leases, when a value is entered in this field, the right of use (ROU) asset in the future accounting schedules is not reduced at Day 1 (against lease liability (LL) and initial direct costs (IDC)).

  • What should happen: Day 1 ROU = Day 1 LL + IDC – Initial Liability Carryover.
  • What is happening now: Day 1 ROU = Day 1 LL + IDC. (No ILC is applied.)

The balance in this ILC field should get pulled into the Day 1 ROU asset balance, and it currently does not. If this field is functioning per OOB, then we need to fix it. It is critical that the transition to the new accounting standards is calculated correctly.

The initial carryover balance (ICB) was not applied to new accounting schedules. Moving forward, if leases are created on or after the look-back period, the initial carryover balance will now be applied to operating leases and finance/capital leases.

[Admin: A similar article is also posted in the IBM TRIRIGA blog. This post is related to the 07.27.16 post by ValuD about handling GAAP and IFRS in TRIRIGA leases. To see other related posts, use the ROU tag.]

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ValuD: How are leases different in US FASB Topic 842 and IFRS 16?

It has now been well over a year since both the FASB and IFRS have finalized their guidance on the future of lease accounting which is effective beginning in 2019 for publicly traded companies. The tasks to move a company’s leases onto their balance sheet can be overwhelming, considering all the necessary steps to reach this goal. Fortunately, the lease classifications have not drastically changed.

US FASB (ASC) Topic 842

The US FASB (ASC) Topic 842 will continue to allow for lease classification as either “Operating” or “Finance” (previously considered “Capital” leases under Topic 840). However, a fifth criteria was added to the existing four possible criteria that could render a “Finance” classification. In addition, the prior bright lines from Topic 840 no longer exists. The new standard will require more judgement, but also allow more flexibility in the classification decision.

If any one of the five following criteria are met, a lease is considered a “Finance” lease. If none are met, the lease is considered an “Operating” lease:

  • Ownership of the underlying asset transfers to the lessee by the end of the lease term.
  • The lease continues a purchase option, which the lessee is reasonably certain to exercise.
  • The lease term is for a major part of the remaining economic life of the underlying asset.
  • The present value of the lease payments and any residual value guaranteed by the lessee is greater than or equal to substantially all the fair value of the asset.
  • The asset is of such a specialized nature that it will not have an alternative use for the lessor at the end of the lease term…

No matter which lease classification is determined, both types of leases will require a right of use (ROU) asset and a corresponding lease liability (LL) to be calculated and presented on the balance sheet…


One of the major differences between US FASB Topic 842 and IFRS 16 is the classification of all leases under IFRS 16 as “Finance” leases. A lease classification test will not be the determining factor of whether a lease will be presented on the balance sheet. Instead, any lease contained in a contract must be reflected on the balance sheet as a financing arrangement…

[Admin: To see other related posts, use the FASB tag, IFRS tag, or ROU tag.]

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Verdantix: Is your workplace strategy costing you millions?

Recently, Verdantix reviewed a range of data on real estate operating costs for both renters and owner-occupiers. Data was pulled from our global annual decision-maker surveys, BOMA surveys and ASHRAE HVAC maintenance surveys to determine a typical baseline operating cost for commercial buildings in the US. An analysis of this average cost data with potential savings from various strategies finds the following.

Over 50% of operational cost savings can be achieved through improved space utilisation. This should come as no surprise for two reasons. First, better use of existing space can reduce the amount of space required for operations leading to reduced costs across all real estate OPEX categories (fixed expenses, utilities, maintenance, and rent costs). More can be accomplished in an existing workplace without incurring the extra cost of acquiring more space for business expansion.

Secondly, the nature of the workplace environment is changing. Work forces are becoming increasingly mobile as the nature of work becomes more collaborative. A Gensler survey found that 32% of employee time is spent in a mix of focused, social and learning environments. Combine this with various teleworking schemes and its no wonder firms like space management vendor Rifiniti finds that, on average, only 45% of workstations are used on any given day, instead of the hoped for 80%. With workstations costing an average of $5,000 to $20,000 apiece, poor space utilisation is like throwing money out of the window…

[Admin: To see other related posts, use the Verdantix tag.]

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Verdantix: Energy vendors expand to facilities or exit the market

Among traditional energy management software players, we are witnessing new roadmaps that include expanded value propositions.

For example, Panoramic Power has transitioned from energy management to using asset-level energy data for operational insight. And Powerhouse Dynamics has gained strong momentum in the restaurant, retail and convenience store markets, which is largely a result from providing added benefits beyond energy management including asset control and condition monitoring, and food safety audits.

In the future, we expect that vendors will continue the transition away from purely providing energy management solutions to broader offerings including operational optimization and asset maintenance. If not, they are likely to get acquired by players in the REEFIM market such as FM:Systems and Lucernex that are competing with other IWMS vendors to be the most comprehensive real estate platform.

To learn more about the Real Estate, Energy, and Facilities Information Management (REEFIM) ecosystem, see our recent report: IWMS Emerges As The Apex Platform In A Complex REEFIM Ecosystem.

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Planon: Is BIM just a big information mess?

What to watch for when preparing for building information modeling (BIM) adoption? Although mitigation measures will be available for any impediments, the total picture is probably still pretty complex to allow for a wide and swift adoption of BIM technology for the lifecycle of buildings…

The BIM technology industry itself has yet to address some specific requirements inherent to building lifecycle management. BIM technology needs to move from a project-tool-set proposition to a digital business service. Developments in IT are moving fast and one can expect the BIM vendors to address them…

There are several indisputable reasons why BIM is slowly but steadily being adopted in specific industries and areas… In addition to avoiding this wasted time and money, there are two other primary reasons why organisations are shifting towards inclusion of BIM in their facility management processes:

  • On an operational level, the visualisations that BIM provides can enable higher levels of efficiency and security in operating and maintaining the facilities.
  • Another reason is compliance. There are governments who demand the use of BIM systems in order for permits to be granted for building development. Other governments require the availability of BIM models for any facility they occupy or rent…

[Admin: This post is related to the 02.28.17 article by FacilitiesNet about using BIM for FM.]

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