Property, plant and equipment (PPE)

Property, plant and equipment (PPE)

RMIT University-Financial Services Group

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=PPE&STYPE=ENTIRE


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


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)


PPE Life Cycle

Capital Budget Submission

Capital Budget Submission

School raises purchaseorder request

School raises purchaseorder request

Authorised P.O requestsend to Purchasing

for processing

Authorised P.O requestsend to Purchasing

for processing

Purchasing raises purchase orderand create assets

pending good receipt

Purchasing raises purchase orderand create assets

pending good receipt

Standard purchase orderStandard purchase order

Assets are recorded in the Asset Register when good receipt

Assets are recorded in the Asset Register when good receipt

Capital expenditure appears in management report

Capital expenditure appears in management report

Split account assignment purchase order

Split account assignment purchase order

Asset are recorded in the Asset Register when invoice receipt

Asset are recorded in the Asset Register when invoice receipt


PPE Life Cycle Continues

Barcode labels printed for newly acquired assets

on a monthly basis

Barcode labels printed for newly acquired assets

on a monthly basis

Email send to Finance Managersadvising barcode labels have been

sent via internal mail

Email send to Finance Managersadvising barcode labels have been

sent via internal mail

Schools are responsible to affixbarcode labels on the assets

Schools are responsible to affixbarcode labels on the assets

An asset barcode confirmation form must be completed once labels have been

affixed on the asset

An asset barcode confirmation form must be completed once labels have been

affixed on the asset

Barcode confirmation date will be updated in SAPfor stocktake purposes

Barcode confirmation date will be updated in SAPfor stocktake purposes

Asset BarcodeAsset BarcodeDisposal of AssetDisposal of Asset

Assets are disposed/written off as a result of the following:-Sale-Trade In-Surplus-Unserviceable-Obsolete-Lost/Stolen

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 completedand signed by authorised officer

An asset disposal form must be completedand signed by authorised officer

The authorised disposal form must be forwardedto FA Accountant for processing.Gains or losses on disposal are

charged to the school.

The authorised disposal form must be forwardedto FA Accountant for processing.Gains or losses on disposal are

charged to the school.


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?


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?


SAP transaction code: AS03









Questions

Documents

Property, plant and equipment (PPE)