Fixed Assets
Definition of Fixed Assets:
• The University defines capital equipment as any single item valued at $2,000 (exclusive
of GST) or greater based on the annual review of assets capitalisation value by RMIT
Council.
Categories of Fixed Assets include:
• Motor vehicles
• Land and buildings
• Leasehold improvements
• Equipments
• Furniture and fittings
• Artwork
• RMIT’s library collection
• Leased assets acquired under a finance lease or hire purchase
RMIT University-Financial Services Group
Policy Provisions
•
The University shall ensure that all purchases of fixed assets are properly
authorised in accordance with budget allocations and the Financial Delegations
Policy and Procedures.
•
The University shall ensure that all fixed assets are valued in accordance with
Australian Accounting Standards and the Financial Management Act. Financial
Services Group shall arrange for independent valuation of all land and buildings
and Art Work at least every five years.
•
All fixed assets must be recorded in the Fixed Assets Register, which is
maintained by FSG. All assets developed within a budget centre with a completed
project cost of $2,000 or higher are subject of FSG’s approval prior to
capitalisation. General view is that it will not be capitalised.
RMIT University-Financial Services Group
Policy Provisions Continues
•
Physical stocktakes of all fixed assets must be carried out at intervals not
exceeding three years on a rotation basis covering total assets within
three years. Any discrepancy discovered during physical stocktakes must
be investigated and where necessary written off following due enquiry
and authorisation.
•
Fixed assets must be kept with due regard for safety and security, and
maintained in good working order.
•
Disposal of all surplus, unserviceable or obsolete fixed assets must be
undertaken without undue delay.
RMIT University-Financial Services Group
Depreciation Method and Rates
• RMIT adopts “straight-line” method of depreciation. Straight-line depreciation
relates to assets depreciating at a fixed amount per annum, which is usually a
percentage of the cost price or capitalised value of an asset over its useful
life.
• All depreciation expenses are currently budgeted centrally, except for “Low
Value Assets” items less than $2K which is part of the school’s operating
budget.
RMIT University-Financial Services Group
Low Value Assets
• The “Low Value” assets are items less than $2,000 which are recorded in the
Fixed Assets Register, but are fully depreciated in the month of purchase –
Cost Element 584100 (Depreciation Equipment < $2K) and 584200
(Depreciation Furniture & Fittings < $2K). These items are not part of the
capital budget.
• There are two asset classes which identify “Low Value Assets” include:
• Asset Class
Cost Element
Class Name
• 61000
166100
Equipment < $2k
• 62000
166200
Furniture & Fittings < $2k
• All software purchases are treated as operating costs – Cost Element 584700
(Software)
RMIT University-Financial Services Group
Barcode: Fixed Assets
• All fixed assets recorded on the Asset Register must have an RMIT barcode
label affixed except for land and buildings, leasehold improvements, library
collection and motor vehicles. Colleges and Portfolios are responsible to
attach barcode labels on the assets.
• Barcode labels for newly acquired fixed assets are printed by FSG (Alex
Dieng) for distribution on a monthly basis to Colleges and Portfolios.
• An email is sent to Finance Managers in the first week of each month
advising barcode labels have been sent via internal mail.
• Once the barcode labels affixed on the assets, a “Barcode Confirmation form”
must be completed and signed.
• Confirmed assets are recorded in SAP.
RMIT University-Financial Services Group
Barcode Label Sample
RMIT University-Financial Services Group
Fixed Asset Life Cycle
Capital Budget
Submission
School raises purchase
order request
Authorised P.O request
send to Purchasing
for processing
Purchasing raises purchase order
and create assets
pending good receipt
Standard purchase order
Split account assignment
purchase order
Assets are recorded in the Asset
Register when good receipt
Asset are recorded in the Asset
Register when invoice receipt
Capital expenditure appears
in management report
RMIT University-Financial Services Group
Fixed Asset Life Cycle Continues
Asset Barcode
Disposal of Asset
Barcode labels printed for
newly acquired assets
on a monthly basis
Email send to Finance Managers
advising barcode labels have been
sent via internal mail
Assets are disposed/written off as a result of the following:
-Sale
-Trade In
-Surplus
-Unserviceable
-Obsolete
-Lost/Stolen
An asset disposal form must be completed
and signed by authorised officer
Schools are responsible to affix
barcode labels on the assets
An asset barcode confirmation form
must be completed once labels have been
affixed on the asset
The authorised disposal form must be forwarded
to FA Accountant for processing.
Gains or losses on disposal are
charged to the school.
Barcode confirmation date
will be updated in SAP
for stocktake purposes
RMIT University-Financial Services Group
Frequently asked questions:
• What information should be provided when raising a PO request for asset?
– Description of the asset
– Capital internal order(s)
– Responsible cost centre
– School internal order (for depreciation purposes)
– Location
– Custodian personnel
– Asset class
– If the equipment or item purchase for an existing asset (provided it is capital in
nature), the existing asset number should be clearly quoted on the PO request.
• Capital expenditure incorrectly coded to operating. What should I do?
– In order to transfer from operating expense to capital, first an asset number must be
created by providing the above information to FA Accountant (Alex Dieng). Prepare
a fixed asset journal using the new asset number created and email to “Journals” for
processing.
RMIT University-Financial Services Group
Frequently asked questions continues:
• What should I do if I receive a direct invoice for an asset without a purchase order?
– In order to process this invoice, first an asset number must be created by providing
the above information to FA Accountant. Quote the new asset number on the
invoice and send to Account Payable for processing. (please note all asset
purchase must have a purchase order).
• Replacement of assets are not automatic except for motor vehicles which are budgeted
centrally (IO 100042).
• Low value assets (<$2K) coded to capital will be transferred to the school operating
budget. It is important that no low value assets are included in the annual capital
budget submission.
RMIT University-Financial Services Group
Questions
RMIT University-Financial Services Group