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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.

Responsibility

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.

  1. Reuse: either in the department or elsewhere in the University
  2. Sell: to maximise income
  3. Dispose: minimising cost
NB - Consider including reference to old equipment removal/part exchange in the specification of new/replacement equipment.

Disposal form

All disposals should be recorded on the University's fixed asset disposal form which can be found on the following link

Fixed Asset Disposal Form

Legislative requirements

Staff must take into consideration all legislative requirements before undertaking any disposal. These include, but are not limited to:

Transferring assets between departments

Unwanted equipment, furniture etc can be advertised on the University wide reuse platform: WARPit . 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.

Sales

When selling the asset externally you should look to maximise any income and therefore the following areas could be considered.

  • Auction
  • Advertise nationally on the Procureweb Surplus Equipment link on the JPPSG web site. This is particularly useful if the item is a piece of technical research equipment.
  • Private companies
  • Employee offers (but safety issues must be considered).

Accounting in UFS

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.

  1. All sales of fixed assets are liable to VAT and the standard rate of VAT should be applied unless the sale meets the criteria for zero-rating e.g. the item is exported. See chapter 9 of the FPM - VAT & Other Taxes and speak to the Tax Section for further advice.
  2. Assets transferred to employees should normally be charged for at the market value. Transfers below market value must be reported as a taxable benefit on the P11d return at the end of the tax year. It is not permissible to give assets away to employees without charge.

Notify the fixed asset helpdesk of:

  • the asset number
  • sales invoice number
  • agreed price
  • any disposal costs

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.

Part-exchanges

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.

Gifts

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.

  1. VAT at the standard rate is normally due on all gifts.
  2. However, in certain circumstances we may be able to zero-rate the supply - you must contact the Tax section for advice in these circumstances.

Taken by researchers/academics

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.

  1. Notify the Fixed Asset Helpdesk of any assets that it is proposed to transfer to another institution when transferring a research grant.
  2. If research is completed and the academic leaves but wishes to take equipment with them and it is not specified within the contract with the sponsor any subsequent removal must be treated by the Head of Department as either a 'transfer' (see Sales) or 'theft' and appropriate procedures should be followed. Such equipment may, however, be sold to the institution to which the academic is moving to - normal disposal procedures should then be followed.

Scrapped, obsolete and damaged items

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.

Damaged, destroyed or stolen items

Please refer to the FPM chapter 18: Insurance, on how to progress any claims. Notify the Fixed Asset Helpdesk of any lost assets.