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Department's responsibilities

iProcurement
When raising a requisition select an appropriate category code – non catalog items eg. %equipment. The track as asset box can be ticked at requisition level which will pull through to the Accounts Payable module.

Accounts Payable
It is the Department's responsibility to ensure that an asset is identified by ticking the "Track an Asset" box in the Accounts Payable module when a fixed asset is purchased.
 
From 1 August 2014, the Finance Division provided departments with a supply of uniquely numbered tagging labels. Departments have the responsibility to record the tag number of the fixed asset within the Accounts Payable screen or through the Fixed Asset module.

When processing the purchase invoice it is important to review the distribution lines. The purchase invoice is entered in the standard way until the lines tab is reached where:

  • an appropriate Transaction code/Expenditure Type is selected
  • the 'Track as Asset' box is ticked
  • the item's tag number is entered

Normally the value of an asset is the actual price paid i.e. the cost price less any normal discount plus any non-recoverable VAT.

If a distribution line for expenditure is moved it is important to ensure that after calculating tax the track as asset box is ticked as required.

The acquisition of equipment exceeding £1m must be notified to the Insurance Section within the Finance Division. Expenditure of £2m or above on capital items requires consent of the Planning and Resources Committee.

This ongoing process of correctly identifying assets at purchase is the key to the fixed asset system operating satisfactorily and is the main requirement for departments to follow. At the month-end the Finance Division carry out centralised procedures and accounting processes in the UFS fixed asset module.


Costs to be included in the value of an asset

  • Any non-recoverable VAT (NB. only the net cost has the 'track as asset' box ticked. The system decides if VAT is required to be added.)
  • Carriage/freight charges
  • Installation costs (inc widening doors, strengthening floors etc)
  • Import duties and VAT

Training on equipment use is not to be included in the value of the asset unless it is included as part of the installation package. Additionally, insurance costs, service contracts or warranties are not to be included in the value of the asset either.


Acquisition Scenarios

Purchasing an item that is less than £30,000 but which is part of a larger capitalised item?

This should be merged with the existing item and capitalised. Let the helpdesk know.

Purchasing numerous assets that total in excess of £30,000 but individually they cost less than £30,000?

Split the assets up into separate assets so they are not capitalised (or request that the Fixed Asset Helpdesk split them).

Equipment purchased under research contracts

Equipment purchased under research contracts are subject to the competition requirements detailed in Regulation 18 and Schedule 1, of the Financial Regulations 2012. As part of the award criteria the whole life time costs to the University of the equipment procurement must be considered.

Assets shared between departments

If an asset is shared between a number of departments, then each department's share will be recorded as a separate asset, with a note cross-referencing them all. In this situation contact the helpdesk.

Equipment received on loan

Where equipment is received on loan departments should have in place procedures to ensure that an appropriate agreement and insurance are put in place and that the equipment is returned in good condition.

Assets funded from more than one source

Each asset can only be assigned one asset category on the system; therefore an asset funded from more than one source of funds has to be split into a number of assets - each being allocated to the appropriate category. A note cross-references these asset numbers. Please speak to Fixed Asset Helpdesk in this situation.

Donated equipment

If an asset is given to the University then the financial records of the University should show this. The true nature of the transaction is that the University is receiving a donation from the supplier, as if it were a donation from any other third party to help pay for the goods or services. This donation needs to be reflected in the UFS.

If this situation occurs please inform the Fixed Asset Helpdesk, giving the following details:

  • date received
  • description of the goods
  • best estimate of value

The Finance Division will then prepare the appropriate transactions to reflect the true nature of the purchase i.e. debit the cost of the fixed asset, adjust the fixed asset register and credit the appropriate deferred grant. This grant will then be written off over the same period as the asset cost.

Equipment purchased with a discount in excess of a normal trade discount

If a discount is given to the University over and above a normal trade discount then the financial records of the University should reflect the nature of the transaction and the true value of the asset. This may indicate for example, the supplier is offering a form of donation to the department.

If this situation occurs, enter the purchase invoice details as normal and tick the box, but also please inform the Fixed Asset Helpdesk, giving the invoice number and the value of the discount received over and above the normal discount given.

The finance division will then prepare the appropriate transactions to reflect the true nature of the purchase i.e. debit the cost of the fixed asset, adjust the fixed asset register and credit the appropriate deferred grant. This grant will then be written off over the same period as the asset cost.

Equipment purchased following an allowance been given for 'trade in'

See Part Exchanges under Disposal of Equipment

Deposit payments

If your supplier requests that you pay a deposit prior to the delivery of the equipment you will need your Head of Department's prior written consent for payments in advance of £10,000 or less. For payments in advance exceeding £10,000 the Director of Finance's advice and prior written consent is needed.

Once the required approvals have been gained the invoice should be entered into AP and the track as asset box ticked for the deposit line. Ensure that a clear description is included and contact the FA Helpdesk who will ensure that when we receive the item it is set up as an asset and all its payments are included and merged to reflect its total cost.

Assets owned jointly with an external third party

The supplier will normally agree to invoice each party separately for their proportion. Therefore, in AP you just tick the track as asset box as normal and the University will register the item as an asset and capitalise it as normal. However, for insurance purposes if the equipment is on our premises we must ensure it at its full market rate, so please put the full value in the comments field and inform the Insurance Team and Fixed Asset Helpdesk.

Equipment constructed within the department

Where an item of equipment is constructed for use by a department in either its teaching or research activities then it may need to be included on the fixed asset register depending on its value. Contact the Fixed Asset Helpdesk in this instance.

Refurbishment costs

If the refurbishment is undertaken by EM and hence Council approved then the costs will be included on the register as an addition to an existing asset. Please contact the Fixed Asset Helpdesk in the event if any asset related queries arising.

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