Assets owned by the University, irrespective of funding source, remain the property the University until sold or destroyed -unless contracts with external sponsors specify otherwise.
Heads of Departments are responsible for the sensible disposal of surplus equipment. It should first be offered to other Departments, and only sold externally once it has been determined that the University no longer requires it.
NB - Consider including reference to old equipment removal/part exchange in the specification of new/replacement equipment. |
All disposals should be recorded on the University's fixed asset disposal form which can be found on the following link
F [1]ixed Asset Disposal Form [1]
Staff must take into consideration all legislative requirements before undertaking any disposal. These include, but are not limited to:
Unwanted equipment, furniture etc can be advertised on the University wide reuse platform: WARPit [4]. If you are unable to post to this site yourself, please email Procurement Services who can post the items for you.
When assets are transferred departmental users can update the Assignments screen with the employee name and new location, but you will need to let the helpdesk know so that they can update the asset key to reflect the correct department.
When selling the asset externally you should look to maximise any income and therefore the following areas could be considered.
An invoice must be created in the Accounts Receivable module using the transaction code LZGA (Fixed Asset Disposals) and the following potential accounting requirements should be considered.
The helpdesk will remove the asset from the fixed asset register and process all the appropriate journals i.e. to transfer the cost, sale proceeds and accumulated depreciation to the disposal account. Any profit from the disposal would usually stay within the department.
Where an offer for a part-exchange is received from a supplier of replacement equipment compare the value with offers from other groups interested in purchasing the items.
From an accounting perspective we need to process the transaction carefully to ensure that the register, sales and purchases are all dealt with correctly.
Issue | Procedure |
The full value of the new asset is reflected in the FA module
That the old asset disposal value is recorded in the FA module |
The invoice is entered in the AP module with the distributions for the full value (pre-trade in) having the Track as Asset box ticked if the value of the equipment is greater than £5,000. Email the FA Helpdesk with full details of both the new and old asset and the trade in value given. |
The value of the old asset is declared in our Financial records and VAT accounted for as appropriate | The trade in value is entered in the AP module, either as a Credit Note or as a negative distribution line in the invoice. This is coded to the Trade In Control Account with no VAT. |
That the supplier only receives the net payment via the AP module |
An invoice is raised in the AR module for the trade in value of the old asset being sold. This is coded as normal and VAT is applied. A credit note is raised in the AR module for the full trade in value. This is coded to the Trade in Control Account with outside scope VAT. The AR invoice and credit note are matched. If required, the AP invoice and credit note are matched. |
If gifting an item to a charity, ensure that they collect the item to minimise any additional costs. Inform the Fixed Asset Helpdesk of the disposal and consider the following potential accounting requirements.
The Financial Regulations specify that assets bought by the University, irrespective of funding source remain the property the University until sold or destroyed, unless contracts with external sponsors specify otherwise.
If you are unsure of the contract terms then contact Research Operations Office (ROO) for clarification. ROO notify the FA helpdesk of grants transferring to other organisations so that relevant assets can be identified and contract terms verified.
In these instances the Fixed Asset Helpdesk should be notified. They will remove the asset from the fixed asset register and process all the appropriate journals i.e. to transfer the cost and accumulated depreciation to the disposal account.
Please refer to the FPM chapter 18: Insurance [6], on how to progress any claims. Notify the Fixed Asset Helpdesk of any lost assets.
Links
[1] https://www.finance.admin.cam.ac.uk/fixed-asset-disposal-form
[2] http://www.environment.admin.cam.ac.uk/e-waste
[3] http://www.environment.admin.cam.ac.uk/
[4] http://www.environment.admin.cam.ac.uk/warpit
[5] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-9-vat-and-other-taxes
[6] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-18-insurance