Property, plant and equipment
(PPE)
Updates:
• From Fixed Assets to Property, Plant and Equipment
(PPE), consistence with the wording used in the RMIT
statutory account. Current version of PPE policies and
procedures can be found via the following link:
• http://www.rmit.edu.au/browse;ID=7c9vl6rwslk6;STATUS=A?QRY=PP
E&STYPE=ENTIRE
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Definition of Property, plant and equipment:
• The University defines PPE as capital equipment with a value of $2,000 (exclusive of
GST) or greater and with a useful life greater than one year based on the annual review
of assets capitalisation value by RMIT Council.
Categories of PPE include:
• Motor vehicles
• Land and buildings
• Leasehold improvements
• Plant and equipment
• Furniture and fittings
• Artwork
• RMIT’s library collection
• Leased assets acquired under a finance lease or hire purchase
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Low Value Assets < $2,000
• 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)
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PPE 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
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PPE 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
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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.
• School Manager purchased an asset using P-Card. How do I record on the Asset
Register?
– Firstly the cost of the asset must be coded to a suspense (ie: G/L 584500), an asset
number must be created by providing the above information to FA Accountant (Alex
Dieng). Prepare a fixed asset journal to transfer from G/L 584500 to capital.
• How do I prepare FA Journal?
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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).
• Motor vehicles are budgeted centrally (IO 100042).
Questions to ask:
• Purchasing large quantity of low value assets. Eg: 200 chairs @ $100 each total cost
$20,000. Operating or capital?
• We don’t have the operating budget, can we use capital budget to purchase low value
items?
• How can we purchase equipment if we don’t have capital budget?
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SAP transaction code: AS03
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Questions
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