Fixed Asset Policy
September 2013
1.
2.
3.
4.
5.
6.
Definition
Criteria
Authorisations
Procedures
Accountabilities
Other Related Policies
1.
Definition
In accordance with NZ Accounting Standards, fixed assets are defined as assets
that are non-current, tangible assets of the Company. Fixed or non-current
assets are those which have an intended useful life of more than 12 months from
the date which the asset is available for use.
The values of these assets are recorded at cost price (exclusive of GST). Cost
price includes the purchase price of assets and all related costs that are
necessary in order to bring the asset into working condition and available for its
intended use. Such costs would include duties, commissions, legal fees,
surveying, architectural and engineering fees, freight and installation costs.
2.
Criteria
In making the assessment of whether the asset will be capitalised (versus an
item of operating expenditure), the Manager Business Services together with the
Manager Aeronautical & Infrastructure will apply the following tests

The transaction results in increased service potential or a future commercial
benefit to the Company;

Accounting definition of a fixed asset;

Nature and context of the transaction;

Where the transaction relates to a component of an existing asset, the
transaction will result in increased economic benefit to PNAL and is not
purely a reinstatement of that component. (one exception being technological
changes extending the life of the asset);

The collective ‘cost price’ value of the transaction totals over $500.00
(excluding GST).
3.
4.
Authorisations
3.1
Purchases of fixed asset items will be made with approvals in accordance
with the PNAL’s Delegations policy as recorded in the Policy Register.
Any purchases outside the delegated authorities will be referred for
approval by the Board.
3.2
Capital Goods and Services exceeding $100,000 must also have a Business
Case presented to the Board with a full justification of the proposed
procurement. Included in the Business Case will be an infrastructure
analysis, including risk analysis and a cost benefit analysis. Where
possible a minimum of three written quotes along with a recommendation
of supplier for the Board to consider.
Procedures
4.1
Approved purchases of fixed asset items are made through PNAL’s
purchase order system. The corresponding invoice is authorised and
passed to the Manager Business Services for allocation to the General
Ledger system.
4.2
All purchasing of goods and services must also comply with PNAL’s
Procurement Policy.
4.3
The Manager Business Services completes a reconciliation of the General
Ledger accounts (Fixed Assets/Assets under construction (WiP)/
Accumulated Depreciation) to PNAL’s Fixed Asset Register on a monthly
basis.
4.4
Capital Goods & Services exceeding $100,000 must also have a Business
Case presented to the Board with a full justification of the proposed
procurement. Included in the Business Case will be an infrastructure
analysis, including risk analysis and a cost benefit analysis. Where
possible a minimum of three written quotes along with a recommendation
of supplier for the Board to consider.
Additions/Improvements or
Disposals within PNAL’s Fixed Asset Register are actioned by the
Manager Business Services upon the receipt of the following
documentation:
-Completed Fixed Asset Maintenance Form, and
-Copy of supporting documentation eg. supplier invoice,
4.5
An updated Capital Expenditure Summary report is completed by the
Manager Business Services and included in the Financial Reports that are
presented to the Board every month.
4.6
Fixed Asset Reviews & Physical Stocktake
A physical stock-take of the Company’s assets is completed by the
Manager Business Services & Manager Aeronautical & Infrastructure on
an annual basis, nearing the completion of the Company’s financial year
end date. The Manager Aeronautical & Infrastructure and Manager
Business Services are also to complete a review of the Accounting Fixed
Asset Register, assessing the appropriateness of the remaining useful
lives of each asset. Any changes are approved by the Chief Executive on
recommendation from the review. The Manager Business Services will
action any necessary adjustments in the Accounting or Tax Fixed Asset
Register (adjustment to the rate of depreciation or expiry of the asset) and
ensure the financial effect of the reassessment is recorded for the purpose
of disclosure in the Annual Report.
4.7
Asset Write-Offs:
Removal of fixed asset items from PNAL’s Fixed Asset register are firstly
notified to the Chief Executive for authorisation and are actioned by the
Manager Business Services upon the receipt of the following
documentation :
-completed Fixed Asset Maintenance Form, and
-any relevant information supporting the asset write-off.
5.
6.
Accountabilities
5.1
The Manager Aeronautical & Infrastructure shall be responsible for the
physical working condition and maintenance of PNAL’s fixed assets. The
Manager Aeronautical & Infrastructure will ensure that any incident or
changes to the assets that will have a financial impact on the Company’s
Fixed Asset Register are reported to the Manager Business Services in a
timely manner.
5.2
The Manager Business Services shall be responsible for operating and
maintaining the Company’s Fixed Asset Register (VIA system). The
Manager Business Services will ensure that all updates and system
backups are completed in accordance with the Company’s ‘Computer
network’ policy.
5.3
The Manager Aeronautical and Infrastructure is responsible for
implementing and managing a ten-year high level asset plan that
incorporates all components of the asset register including airside items
and non-airside items. This will be reviewed on an annual basis in order
that the assets are maintained and the cost for replacement or
maintenance is factored into the annual budget.
Other Related Policies
Delegations Policy
Finance and Treasury Policy
Procurement Policy
Computer & Networks Policy
Handling of Tenders
Independent Contractor
This policy was approved by the Board in September 2013 and is scheduled to be
reviewed by the Board no later than September 2015.
FIXED ASSET MAINTENANCE FORM
ASSET I.D. NUMBER:
Transaction Type:
Addition
Improvement
Sale
Write Off
Asset Description:
( details / make / model)
Quantity :
Supplier:
(attach a copy of original invoice to this form)
Date of purchase/disposal:
Value:
$
/
/
(excl GST)
Estimated Useful Life:
(years)
Company Depreciation rate:
%
Taxation Depreciation rate:
%
Asset Location:
Authorised Signature:
Name & position: