What is the purpose of an asset management policy?

• A. Describes day-to-day tasks.
• B. Establishes focus and intentions of the organization.
• C. Sets tax policies.
• D. Specifies supplier contracts.

Answer: (B)

An asset management policy serves to establish the organization’s focus and intentions for how assets will be managed. It is a high-level statement that defines why asset management exists, the scope of assets covered, guiding principles, and the governance framework. This policy sets the direction for planning, decision-making, investment, and resource allocation across the asset lifecycle, ensuring actions align with organizational goals, risk tolerance, and commitments to performance and continual improvement. It’s not about routine tasks, tax rules, or specific supplier contracts; those are handled in procedures, separate policies, or contracts.