F09
Grace Eyre
POLICIES AND PROCEDURES
Fixed Assets & Depreciation Policy
Date approved:
Approved by:
Date for Review:
December 2010
FC
December 2015
Contact Person:
Richard Morris
Who is the policy for?
Active Lives:
Shared Lives Carers:
Shared Lives Staff:
Admin:
Volunteers:
CHOICES:
Driver/Escort/
Caretaker/Cleaner:
YES
NO
YES
YES
YES
YES
YES
1
F09 Fixed Assets & Depreciation Policy – reviewed December 2010
Fixed Assets and Depreciation Policy
Introduction
Fixed assets are tangible capital items that have an economic value over more than
one financial year. The cost of fixed assets is included in the Balance Sheet, and the
assessed annual economic value is included in the Income and Expenditure.
Fixed Assets are properties and goods of a certain value, which have a “life
expectancy” of more than one year. In accounting terms therefore, although their
cost may fall into one year, their value continues, and they must therefore be
reflected in terms of their wealth over their life expectancy.
Property Assets and their treatment are determined by Statement of
Recommended Practice (SORP) rules. All fixed assets will be depreciated on a
straight-line basis over their expected useful economic lives. Land values will not be
included in the calculations.
Other Assets constitutes plant, machinery, equipment, vehicles and furniture etc.
Due to the organisation’s growth, a procedure is now required to ensure correct
treatment of such assets.
I. Plant and Machinery
This would include items such as central heating, lifts and boilers.
It is proposed that any expenditure on these items is depreciated on a
consistent basis, agreed as per property improvements assets above.
II. Equipment
This would include computers, office machinery (photocopiers etc.), power
tools, office equipment, kitchen equipment etc.
It is proposed that any item in excess of £1,000 is entered on to the fixed
asset equipment register, and depreciated over a period of Five years.
Electrical equipment is listed on its own, and all computer related assets will
be depreciated over a period of Two years.
Exceptions to equipment policy will be those items where the Finance
Manager certifies that for specific reasons, the life expectancy is
unreasonable (e.g. where an item in a project, subject to such heavy usage
that swift deterioration is unavoidable).
III. Vehicles
Motor vehicles purchased for use by any service will be depreciated over a
period of Four years. New Motor vehicles with full warranty will be
depreciated over a Five year period.
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F09 Fixed Assets & Depreciation Policy – reviewed December 2010
IV. Furniture
This will include all office furniture and all services furniture. It is proposed
that:
a) Office Furniture
All new furniture where the item (or combined items) cost is in excess of
£1,000 is entered on the fixed asset register, and depreciated over a
period of five years. *(Second hand furniture is excluded).
b) Project / Grant Furniture
Due to excessive wear and tear all project furniture is to be written down
in the year of purchase, with the exception of those items where the cost
is in excess of £1,000.
General Rules
% Depreciation Charge
Land
0%
Property
40 years
Property Improvements
15 years
Vehicles (New)
5 years
Vehicles (Second hand)
4 years
Plant and Machinery
5 years
Office Furniture fittings
(Qualifies as fixed assets)
5 years
Computer and other equipment
2 years
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F09 Fixed Assets & Depreciation Policy – reviewed December 2010