Property, plant and equipment (PPE)

Property, plant and equipment (PPE)

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 RMIT University-Financial Services Group

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 RMIT University-Financial Services Group

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) RMIT University-Financial Services Group

PPE Life Cycle RMIT University-Financial Services Group

PPE Life Cycle Continues RMIT University-Financial Services Group

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? RMIT University-Financial Services Group

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? RMIT University-Financial Services Group

SAP transaction code: AS03 RMIT University-Financial Services Group

RMIT University-Financial Services Group

Questions RMIT University-Financial Services Group

Property, plant and equipment (PPE)