Bulletin Board - Review and Comment
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(1) This procedure provides business rules to ensure compliance with accounting standards related to capitalisation and depreciation/amortisation of tangible and intangible assets used by the RMIT Group. (2) Authority for this document is established by the Financial Management Policy. (3) This procedure applies to all assets owned or controlled by the RMIT Group, including library collections and works of art. (4) All assets purchased, constructed or loaned must be recorded in RMIT’s accounting systems to enable RMIT to comply with relevant accounting standards. This includes all: (5) The cost of an item of property, plant and equipment (PPE) will only be recognised as an asset if: (6) The initial cost of an asset should include: (7) Central Finance Operations is responsible for identifying assets requiring capitalisation. Organisational units may flag items, such as capital projects, for review. (8) A progressive three-year cyclical stocktake of PPE is undertaken to ensure operational areas maintain effective asset control. (9) Central Finance Operations initiates the stocktake and provides fixed assets listings to operational areas. (10) Operational areas are responsible for day-to-day stewardship of assets, including verifying their existence and condition during the stocktake and advising Central Finance Operations of any discrepancies. (11) Each PPE and leased asset must be depreciated, with the exception of land and artwork asset clauses. (12) An intangible asset is amortised on a straight-line basis over its estimated useful life from the date it is available for use. (13) An independent valuation to ensure that fair value is determined from market-based evidence must be undertaken at least: (14) Operational areas must notify Central Finance Operations about any asset change of location, transfer to another area, loan to an outside institution or loan to an RMIT staff member. (15) Loans to outside institutions and/or RMIT staff must have the prior approval of the relevant operational areas of RMIT. It is the borrower’s responsibility to cover costs associated with removal and return, and to insure against losses. (16) All assets must be kept with due regard for safety and security and maintained in good working order. (17) RMIT must ensure the disposal of assets is correctly accounted for with an appropriate audit trail in place. (18) In the event of early termination of lease or disposal of a leased asset, Central Finance Operations must be notified in a timely manner. (19) Assets with a nil book value (fully depreciated) are reviewed annually. Any asset carried at nil book value for five years or more is written off unless teh relevant operational area requests its retention and advises Central Finance Operations accordingly. This provision generally applies to the Equipment, Furniture and Fittings asset class and the Library Collection asset class. (20) Organisational units are responsible for obtaining appropriate approval for capital expenditure. (21) Property Services Group is responsible for reviewing property-related work in progress (WIP) projects. (22) Information Technology Services is responsible for reviewing IT-related WIP projects, whether it be a tangible or intangible asset. (23) Areas of RMIT that receive donated assets must advise Central Finance Operations about each donation and the fair value of the donation. (24) Staff purchasing assets are responsible for ensuring that all purchases comply with purchasing processes and meet the relevant occupational, health and safety requirements (25) Refer to the following documents which are established in accordance with this procedure:Asset Management Procedure
Section 1 - Context
Section 2 - Authority
Section 3 - Scope
Section 4 - Procedure
RMIT Assets
Recognition of Assets
Stocktake
Depreciation and Amortisation
Revaluation
Change of Location, Transfer and Loan
Asset Maintenance and Disposal
Responsibilities
Section 5 - Guidelines and Instructions
Top of PageSection 6 - Definitions