3 A B C D E F G H I J K L M N O P Q R S T U V W Y

ASEAN

Association of Southeast Asian Nations (ASEAN). Created in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. By 2021 ASEAN had grown to include Brunei, Vietnam, Laos, Myanmar, and Cambodia, representing nearly 700 million people.  Extended groups have been used for economic development discussions –  ‘ASEAN plus 3’ adds China, Japan, South Korea;  ‘ASEAN plus 6’ further adds India, Australia and New Zealand.

Assemble to Order

Assemble to Order (ATO) is a production method that occurs when an item is assembled after receipt of a customer’s order. The key items used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product.

Asset Retirement Obligation

Asset Retirement Obligation (ARO) refers to the financial responsibility a company has for removing and restoring facilities, such as oil wells and pipelines, once they reach the end of their useful life.

When companies operate in the oil and gas sector they install equipment and facilities to extract and transport resources. However, these assets have a limited lifespan and will eventually need to be dismantled or retired. The process of retiring these assets involves cleaning up the site, plugging wells, and restoring the land to its original condition.

ARO is an accounting concept that ensures companies set aside funds over time to cover the future costs of decommissioning and restoring these facilities. This helps companies manage their financial responsibilities and ensures that they have the necessary funds when it’s time to retire and remove the assets.

Asset turnover

Asset turnover measures the efficiency of the use of assets to produce sales. It is a ratio which shows how many dollars of sales were generated by each dollar of assets. Calculate by dividing net sales by average total assets.