Accounting for assets basics

  1. The Australian National University Act section 45 requires that '... the Council must do all things necessary to ensure that adequate control is maintained over the assets owned by, or in custody of, the University'.
  2. Responsibility for the use, maintenance and custody of plant and equipment resides with the heads of budget units. To assist in the discharge of this responsibility, reliable management information regarding the assets in use by their budget unit is required.
  3. Australian Accounting Standards require property, plant and equipment assets must be shown separately by class and by cost structure. ANU holds asset classes at cost (including deemed cost) and at valuation.
  4. Each business unit itself primarily only deals with plant, equipment, motor vehicles and artworks.
  5. Facilities and Services primarily control property – land, buildings and infrastructure.
  6. Plant, equipment, motor vehicles and artworks are managed within the ESP Asset Management System (ESP AMS). This ledger is a subsidiary ledger of the General Ledger and the two must balance. F&BS undertake reconciliations at the end of each period. These reconciliations are distributed to business managers, who must ensure that all reconciling items are actioned promptly.
  7. You must consider the combined ACTUALS and FINANCIAL ledger balances in the General Ledger when examining balances of assets, including balance forward and adjustments.
  8. The initial asset purchase is an ACTUALS entry. Subsequent movements, depreciation etc are FINANCIAL entries.
  9. Assets are held in R and T ledgers. NOT held in S, Q or E funds. Asset purchases are funded through S/Q using the 72xx Transfer (equipment) accounts.
    1. For example: An S Fund project is purchasing an asset, being research equipment, costing $10,000. The AP voucher funding the purchase of the asset out of the S Fund project, would be coded as follows:
      Code Record
      S2451001 7205 $10,000 Debit
      R24510 7205 ($10,000) Credit
      R24510 3105 $10,000 Debit
    2. The fund/department coding for lines b. and c. are determined by the funding source code. The fund will be R or T (normally R) and the department code holding the asset will be the same as the department for the funding source, or the main funding source, where an asset is funded from more than one funding source.
      Prior to a change during 2007, S/Q funded assets were held in department xx991 in most budget units, however it was considered that the new approach allowed for the asset to more easily be identified and tied to the department using the asset. It is important that assets of this nature identify the funding source.
    3. The asset is then added in ESP AMS - within R24510 - RSRCH. It is recommended that when adding these assets in the ESP AMS, the comment panel is completed, recording the detail of the asset, beginning with "Funding provided by ___________", so that the asset can be identified as one that is funded through grant or other funds.
  10. There are THREE "Books" within ESP AMS.
  11. Two books are related to assets:
    1. CAPITAL – Office equipment, research equipment, computer equipment, teaching, motor vehicles, other equipment, musical instruments
    2. ARTWORKS
  12. There is a third book being NONCAPITAL (Portable and Attractive) – Items < $5,000 not capitalised. These items are NOT ASSETS. However the AMS allows us to use this database system to manage Non-Capital or Non-Asset items which we consider to be portable and attractive and worth keeping a record of.
  13. What constitutes the COST of an Asset. Per AASB 116, the cost of an item of property, plant and equipment comprises:
    1. its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;
    2. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and
    3. the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
  14. When recording assets you should at minimum have:
    1. Description
    2. Cost (not required for non-Capital items)
    3. Ledger Location – (make sure it matches where the payment is!)
    4. Barcode number (if in use)
    5. Serial numbers etc
    6. Links to AP vouchers
    7. Show fund source if funded through S/Q/E – in comments field
    8. Physical location – Location code PBBB.F.RRR (important for insurance)
    9. Use comments field to record other significant information off payment documentation.
  15. Stocktake policy states stocktaking must occur once every two years – best practice is every year.
  16. Asset manager to review accounts 3102 – 3170 before end of each period and ensure any new assets have been added or any miscoded payments are journalised.
  17. Note – MV registration must be EXPENSED – Account 5328.
  18. Repairs and maintenance, replacement parts – even over $5,000 – should be EXPENSED.
  19. Expenditure in improvements of existing assets, regardless of amount, should be recognised as an increase in the value of assets where:
    1. The expenditure results in an increase in the service capacity or quality of the service provided by the asset; or
    2. There has been an extension to the asset's useful life as a result of the expenditure.
    3. When recording an addition to an existing asset please contact F&BS – SRLI for assistance, especially if the asset has been previously revalued.
  20. You should advise F&BS of any donated assets so that they can be brought to book, insured and properly accounted for. Complete the