FIXED ASSET MANAGEMENT

Through the walk-through that our team has done, we have observed and identified the policies and
procedures of the Barongot Company with regards to its Fixed Asset Management.

ORDERING PROCESS

On the process with regards to the Fixed Asset Management, the ordering process comes first. The
ordering process depends whether the asset is for a new store or for an existing store. In this case, the
Barongot Group of Companies, orders for a new store. The company’s design and engineering staff will
prepare the ocular floor plan which will be reviewed and approved by the operations manager. When the
ocular floor plan is approved, ordering process will immediately start. Meanwhile, the project engineer
will prepare the purchase request with three (3) duplicate copies. These copies are in white, blue and
yellow color distinctions. The purchase request will be forwarded to the project manager for another
approval. The project manager then will evaluate whether the requested assets were in accordance with
the company’s checklist.

The approved purchase request details will be entered by the purchasing staff to the purchase request
system manually, after which, the purchase order which is to be prepared by the purchasing staff will be
also forwarded to the Chief Executive Officer (CEO). Moreover, the CEO will verify and approve the
purchase order. When the purchase order is approved by the CEO, the purchase order will be sent to the
supplier through email and fax.

RECEIVING PROCESS

Upon receiving the asset, the project manager will inspect the asset. The project manager makes sure that
all the source documents are presented such as sales invoice, delivery receipts and purchase order sent
recently to the supplier.

After inspection, the project manager will verify the document and asset received. The project manager
will be observing if the asset’s source documents matched exactly with the asset received. After which,
the project manager will sign the documents.

RECORDING AND DISBURSEMENT

The accounts payable department receives and signs the three (3) documents which are the purchase
order, delivery receipt and sales invoice purchase. Then, the accounts payable staff reviews the source
documents and confirms if the source documents matched the journal entry recorded. If the asset is
acquired on account, an accounts payable voucher is generated. The accounts payable head reviews and
approves the documents which include the purchase order, delivery receipt accounts payable voucher,
sales invoice which will be, later on, filed.
The four documents mentioned above will be verified by the cash accountant supervisor. When the
accounts payable is paid, the cash accountant prepares the check voucher. The check will be sent to the
supplier and the paper which the check was attached will be returned back to the fixed asset accountant
for filing of documents. The fixed asset accountant enters the documents to the lapsing schedule and to
the journal entry in the system.

With regards to the purchase through cash basis, the cash accountant will verify the documents which
include, the purchase order, delivery receipt accounts payable voucher, sales invoice and will prepare the
check for payment. Likewise, the check will be sent to the supplier and the paper which the check was
attached will be returned back to the fixed asset accountant for filing of documents. The fixed asset
accountant enters the documents to the lapsing schedule and to the journal entry in the system.

DISPOSAL

The store personnel will monitor the performance of the Fixed Asset. The store personnel will assess if
the equipment is still working properly. Thus, if the company assures that the assets are working properly,
they will not dispose any equipment.

The store personnel will also the performance of the Fixed Asset. The store personnel will assess if the
equipment is not working properly, the project manager prepares an assessment form that contains
reasons and deficiencies of the asset, the assessment form will be forwarded by the store personnel to
the project manager for the review and approval. The approved assessment form will be sent to the design
and engineering staff. The design and engineering staff will determine if the asset is for disposal. After
which, the project manager will advise the fixed asset manager for disposal.