Friday, 17 August 2018

Accounting for Fixed Assets

Purpose

This policy document establishes policy and procedures for accounting for fixed assets.

Scope

This policy document applies to assets utilized by the STCU and by projects financed by the STCU.

Procedures and Policies

Accounting and Title

  1. Fixed assets purchased for STCU administration and supplemental budgets are charged to expense in the year of purchase, without regard to useful lives. This accounting practice best matches the administrative and supplemental revenues contributed by the donor parties with related expenses in the accounting period.
  2. Fixed assets purchased for projects funded by the STCU are charged to project expense in the year of the purchase, without regard to useful lives.
  3. Title to fixed assets purchased for projects funded by the STCU.
    1. Title to fixed assets with a per unit acquisition cost of less than $2,500 US vests with the participating institution (i.e. the institution in which the fixed assets will be used on the project) at the time of delivery to the participating institution.
    2. Title to fixed assets with a per unit acquisition cost of $2,500 US or more vests with the STCU until termination, cessation, or completion of the project, at which time title will vest with the participating institution unless prior to or on that date the Center informs the participating institution of its intention to retain title to the fixed assets. If the Center retains title to the equipment, the Center will provide instructions to the participating institution for disposition of the equipment. The Center will pay the cost of disposing of such equipment.

      It is the intention of the STCU to vest title to fixed assets with a per unit acquisition cost of $2,500 US or more in the participating institution where the fixed assets were first delivered. However, the STCU reserves the right to transfer such fixed assets to another participating institution upon termination, cessation or completion of the project in order to satisfy an urgent requirement. At the present time, the STCU does not anticipate receiving any future economic benefit from these assets; hence the departure from International Accounting Standards.

Responsibilities and Controls

Fixed Assets responsibilities should be distributed among several positions. This separation is necessary for adequate internal control of the Fixed Assets System (ACCPAC).

  1. AOB and SB Purchases: - Accounting and control of Fixed Assets, purchased for STCU administration and supplemental budgets with a per unit acquisition cost of $100 or more, the following designation of duties are recommended:
    1. The Assistant Procurement Officer initiates the process of recording and controlling Fixed Assets by forwarding a copy of any approved purchase orders for fixed assets with a unit acquisition cost of $100 or more, to the Building Maintenance Supervisor. This alerts the Building Maintenance Supervisor that there will soon be a new fixed asset delivered to the Center;
    2. The Secretary of the Administrative Department provides the “Doruchennya” to the STCU grantee (i.e. driver, maintenance person, etc.) responsible for delivering the fixed asset to the Center. When this person arrives to the Center with the new asset, he/she is required to immediately report to the Building Maintenance Supervisor with the purchased asset. The deliverer then provides the “Nakladna” to the Building Maintenance Supervisor;
    3. The Building Maintenance Supervisor receives all fixed assets and verifies items received agree in quantity and description with the purchase order. The Building Maintenance Supervisor then tags the asset with a bar code label serial number, making sure to maintain consistency in placement of the tag on each similar type of asset. The tags should be accessible for viewing;
    4. The Building Maintenance Supervisor enters all information into the fixed assets module of ACCPAC, including: fixed asset number, description, location, status, classification, department, serial and model number and vendor name;
    5. The Treasurer reviews the received assets and verifies their quantity and description. The Treasurer verifies the ACCPAC report of additions against Payment Vouchers each month and inputs Payment Voucher’s number, acquisition date, and cost in ACCPAC system opposite appropriate asset;
    6. The Building Maintenance Supervisor handles the disposal of any moveable asset, whether by sale, trade-in, loss, or donation in the following manner (all disposals should be done utilizing the disposal function of the ACCPAC Fixed Asset Module):
      • Stolen assets: If any fixed asset has been stolen, the employee discovering the theft must report the theft to the Chief Administrative Officer. This is to be done as soon as possible, but no later than three days from the day of discovery.
        The Chief Administrative Officer will contact the Police and Insurance offices in order to determine one of the following outcomes: asset recovery, reimbursement of the loss, or loss.
        The Fixed Asset Write-off Voucher must be completed and approved by the Chief Administrative Officer. If the original purchase price of the fixed asset exceeds $1,000 then the approval of the Executive Director is required. Once approval is obtained the Building Maintenance Supervisor then disposes of the asset in the fixed assets module of ACCPAC.
      • Broken assets: If any fixed asset is broken, the employee responsible for the asset informs the Building Maintenance Supervisor of the occurrence. The Building Maintenance Supervisor completes the Fixed Asset Write-off Voucher and gives to the Chief Administrative Officer for approval. If the original purchase price of the fixed asset exceeds $1,000 then the approval of the Executive Director is required. Once approval is obtained the Building Maintenance Supervisor then disposes of the asset in the fixed assets module of ACCPAC
      • Donated assets: For the donation of a fixed asset, a copy of the letter signed by the Executive Director must be obtained. The Building Maintenance Supervisor completes the Fixed Asset Write-off Voucher, attaches a copy of the signed letter, and provides the documents to the Chief Administrative Officer for approval. The Building Maintenance Supervisor than disposes of the asset in the fixed assets module of ACCPAC.
      • Sold assets: For the sale of a fixed asset, a Working Cash Voucher signed by the Executive Director and supporting documents signed by the Chief Administrative Officer and customer must be obtained. The Building Maintenance Supervisor completes the Fixed Asset Write-off Voucher, attaches a copy of the signed Working Cash Voucher and supporting documents, and then provides all the documents to the Chief Administrative Officer for approval. The Building Maintenance Supervisor then disposes of the asset in the fixed assets module of ACCPAC.
    7. The Deputy Chief Administrative Officer performs the annual inventory. Please see STCU Standard Operating Procedure for Physical Inventory (STCU Document SOP - XVI). The Chief Administrative Officer provides the Executive Director with an annual summary of inventory.
  2. Project Purchases Less Than $2,500: :Fixed assets purchased for projects funded by the STCU with a per unit acquisition cost of less than $2,500 US are not recorded in the STCU’s fixed asset accounting system or directly controlled by the STCU. Such assets are observed and recorded in working papers during periodic project monitoring visits to institutions where projects funded by the STCU are performed.
  3. Project Purchases Greater Than $2,500: Fixed assets purchased for projects funded by the STCU with a per unit acquisition cost of $2,500 US or more are recorded in the fixed assets module of the ACCPAC accounting system. These assets are recorded by participating institution and project number. These assets are also observed and recorded in working papers during periodic project monitoring visits to institutions where projects funded by the STCU are performed.

Effectivity

This procedure is effective 1 January 2001.

Leo Owsiacki, Executive Director

See also: