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Fixed Assets
Course Manual
Contents
1. Fixed Assets Overview
Fixed Assets – What are they?……………………………………… 3
Why do we track them?………………………………………………3
University Policy……………………………………………………..3
Depreciation…………………………………………………………. 4
Fixed Assets Process Overview……………………………………... 6
3. Viewing Information
Viewing Financial Information……………………………………...16
Viewing Asset Assignments………………………………………... 17
Viewing Asset Source Lines………………………………………... 18
Viewing Asset Book Information…………………………………... 19
Viewing the Transaction History of an Asset………………………. 21
Viewing the Depreciation of an Asset……………………………….22
Viewing the Cost History of an Asset……………………………….23
4. Reports……………………………………………………………… 24
6. Common Queries…………………………………………………… 27
7. Further Help………………………………………………………... 28
8. Appendices
Appendix A: Asset Categories………………………………………29
Appendix B: Glossary of Terms…………………………………….31
Appendix C: Central Finance Function Following
Departmental Involvement……………………………33
Appendix D: Automatic or Centrally Generated
Accounting Entries………………………………….. 34
Appendix E: Enquiries – Exporting to Excel……………………….. 37
A fixed asset is an asset that we retain for more than a year. Some common examples
within the University are:
• Scientific equipment
• Office equipment, e.g. photocopiers
• Machinery
• Vehicles
• Land and Buildings
• Property held for Investment purposes
University Policy
Due to the large number of fixed assets that the University owns, our policy is to only
recognise within the assets module those that cost over £750 (including any non-
reclaimable VAT).
In addition to this, equipment that costs over £10,000 is capitalised if funded by:
• The University of Cambridge
• Funding Council and other grants
• Research Grants
• Trust Fund or Donations (except generally Works of Art as there are
often conditions on how we can dispose of them)
Expensed This means that the full cost of the item is included in
your departmental accounts during the year of
purchase.
Depreciation
A fundamental accounting concept is that you match your expenditure against the
income that it helps generate. For assets this is done by depreciation.
a) The cost of the asset is capitalised and transferred to the University's Balance
Sheet from the Income & Expenditure Account.
b) Then in each accounting period a depreciation charge is levied on the Income &
Expenditure Account to write off the cost.
Thus we split the cost of these assets out over a number of years to reflect the
contribution they make to the services we provide in future years.
However, all you need to know is that when you purchase the item you enter its full
value into the Accounts Payable module, and code it against your departmental
accounts (using a normal expenses code) in order to generate a cheque for the
supplier. The cost is being spread over a number of years by means of depreciation
and is a function that is carried out centrally by the Finance Division.
Properties that are owned by the University were only brought into the University's
Fixed Asset Register in 1994. At this stage they were all revalued and this is the
starting point for the subsequent depreciation calculations.
Many people may think of this as a strange concept, as we are used to property values
rising instead of diminishing. In this case the depreciation reflects the expense to the
University of maintaining the buildings so that they are in a habitable and useable
state.
For example, it could be expected that after a number of years the wiring system of a
building might become outdated and need replacing. If the building were to be sold at
that point of time then it would realise a lower value.
The depreciation is considered in isolation to the cost of any maintenance work that is
undertaken on a building. These costs would be "expensed" in the year that they
occurred. This is different to construction costs that are incurred when an extension
etc to a property is built; in this case it is seen as an "addition" to the existing asset
and it would be included in the value to be depreciated.
Fixed asset
Capitalising
journals created
Department's role in relation to the accounting for fixed assets is very limited. The
majority of the accounting for fixed assets is done centrally by the Finance Division
on your behalf.
There are two main departmental roles:
(i) The initial purchase of the fixed asset in the Accounts Payable module;
(ii) Viewing and updating details of existing assets in the Fixed Asset module.
Buying an Asset
1. When buying a Fixed asset
Enter the purchase invoice into the Accounts Payable module in the normal
way until you get to the distribution window.
Select an appropriate Transaction code (if paying for the item out of a GL
account) or Expenditure Type (for Grants):
Scenario 1
Buy numerous items that total more than £10,000 but each item individually costs less
than £10,000
The items should be recorded separately (if over £750) but not capitalised. If the
distribution line is the same but you have for example 30 items, just enter one
distribution line and tick the box. The Finance Division will split the 30 items
accordingly.
Scenario 2
Buy one item that is less than £10,000 in value but which is an add-on-part of a larger
capitalised item.
This item should be merged with the larger item's record and capitalised. Merging will
be carried out centrally. All that is required is to e-mail the Fixed Asset Helpdesk
(UFS_FA@admin.cam.ac.uk) with the invoice numbers and a note that the invoice
numbers and a note that the items need merging.
Access to the fixed asset module will be achieved through the responsibility:
Please note that the sub-ledger security rules do not apply to the Fixed Asset module.
Although one department might purchase and use an item, all fixed assets are the
property of the University as a whole.
OR
1. To recall the details of one of your department's fixed assets enter its asset
number, or:
• your department's Asset Key; plus
• any other details that you know about the item
using the tabbed regions
Find by Guidelines
Asset detail Enter descriptive information such as asset number, description
or category as the search criteria.
Each fixed asset is allocated an 'Asset Key' on the system. This details your
department code and which register of assets it is recorded on.
At present each department only has one register and that is entitled 'Misc'.
Thus NA.MISC is the Department of Engineering's register of assets. This
information is defaulted in upon asset set up.
Note: If you want to be able to split your assets up into subgroups then
further asset keys can be set up centrally, but all alterations (or transfers
between subgroups) will also have to be done centrally.
NB, you will have two buttons entitled ‘Open’ and ‘Assignments’
if you have searched through Assets Workbench
Route.
This window contains many fields and scrolls across to the right.
However, the majority of fields are not utilised at the moment.
Once an asset has been posted into the Fixed Asset module by central finance
(normally from the Accounts Payable module) departments are able to:
Button: Open
We currently have around 33 different asset categories (see Appendix A), and these
summarise the University's assets by the source of their funding and between:
Unique
number
across the
whole
Normally
University
1
Dept ref
number
• Equipment
• Freehold buildings
• Land
• Long leasehold
• Short leasehold
Field Notes
Tag Number This is an optional field where you can add your own
departmental reference number.
When completed click on Done and this will automatically save your amendments.
Button: Assignments
1. Once you have located the asset in question enter the Assignments window.
Here, enter '-1' (minus one) in the Unit change box of the first line and then tab
to the next line down.
Enter -1
here
2. On the second line enter '1' into the Unit change box select from the list of
values the new employee name for your asset.
Use the buttons at the bottom of the window to view the required details:
At present there is only limited information on the system, regarding the physical
location and responsible person, for the majority of the University's assets.
It is hoped that over time Departments will update these details for themselves.
Buttons: Assignments
At present the location codes displayed are building codes (eg. T32 is
Greenwich House). Departments will be able to add more specific details such
as floors and room numbers themselves.
This screen displays information that was recorded in the Accounts Payable module
when the asset was purchased:
The asset
number
On the system all departments’ assets are recorded within just one book for the whole
University - CU Book
Recoverable Cost the purchase price including the non- recoverable VAT.
Basic rate% Used when calculating depreciation using the Reducing balance
Method
The original
transferred in
from the
Departments
old register
The University policy is that only assets over £10,000 are depreciated.
The monthly depreciation charge is then transferred back (as a debit) to the Income &
Expenditure section of the department's accounts using the source of funds ZZZZ and
the transaction code FBBA ( I&E Depreciation).
The monthly
depreciation
charge
Original cost of the asset - its salvage value = £ 30,309.05 = £631.44 monthly depreciation
It's calculated useful life ('life years') 48 mths
• Quarterly statement of departmental assets will be sent out from Central Finance
• There are standard reports available on the system for Fixed Assets, but they are
probably of limited value. The reports which have (UFS) or (CAPSA) after the
name have been modified for University purposes and require your department
code however it is worth remembering that there is no sub-ledger security within
the fixed asset module.
All accounting entries for capital assets have a source of funds in the Z range.
Therefore, if you run the Budget-Comparing to Actual (UFS) report in the general
Ledger we recommend that you restrict the range for sources of funds to:
This helps to prevent confusion, and will not distort your view of your actual income
and expenditure in your department with the accounting entries for depreciation.
Month End
There are no special procedures, although you may want to
review your department's asset additions for completeness
after the 5th working day in the month.
Purchasing numerous assets that total in excess of £10,000 but individually they
cost less than £10,000…
Split them up into separate assets so they are not capitalised (or request that
central Finance split them).
Purchasing an item that is less than £10,000 but which is part of a larger
capitalised item…
This should be merged with the existing item and capitalised. Let Central
Finance know.
However, you could run an Enquiry searching on your department's asset key
and then export the results to Excel.
Further Help
Tel: 66780
E-mail UFS_FA@admin.cam.ac.uk
Segment 1 Segment 2
EQUIPMENT ASSETS UNIVERSITY FUNDED
EQUIPMENT ASSETS RG – OST RESEARCH COUNCIL
EQUIPMENT ASSETS RG – UK-BASED CHARITIES
EQUIPMENT ASSETS RG – CENTRAL GOVT BODIES
EQUIPMENT ASSETS RG – LOCAL AUTHORITIES
EQUIPMENT ASSETS RG – PUBLIC CORPORATIONS
EQUIPMENT ASSETS RG – IND & COMMERCE
EQUIPMENT ASSETS RG – HLTH & HOSPITAL AUTHS
EQUIPMENT ASSETS RG – EUROPEAN COMMISSION
EQUIPMENT ASSETS RG – EU GOVT BODIES
EQUIPMENT ASSETS RG – EU OTHER
EQUIPMENT ASSETS RG – OTHER OVERSEAS
EQUIPMENT ASSETS RG – OTHER SOURCES
EQUIPMENT ASSETS EXPENSED LOW VALUE
EQUIPMENT ASSETS FUNDING COUNCIL
EQUIPMENT ASSETS OTHER GRANTS
accumulated depreciation
The total depreciation taken for an asset since it was placed in service. Also
known as life-to-date depreciation and depreciation reserve.
asset key
Each fixed asset is allocated a key on the system. This details your department
code and which register of assets it is recorded on.
asset type
Either expensed, capitalised or construction-in-progress
assignment
Shows the location of the asset, the details of the employee who is responsible
for it (if recorded) and the GL account which the depreciation will be charged.
books
Shows the financial information regarding the cost, depreciation and treatment
of the asset within the FA module.
capitalised assets
Capitalised assets are assets that you depreciate (spread the cost expense over
time).
capital project
A project in which you build one or more depreciable fixed assets.
depreciate
To depreciate an asset is to spread its cost over the time you use it. You charge
depreciation expense for the asset each period. The total depreciation taken for
an asset is stored in the accumulated depreciation account.
expensed asset
An asset that you do not depreciate, but charge the entire cost in a single
period. Oracle Assets does not depreciate an expensed asset, or create any
fixed asset
An item owned by your business and used for operations. Fixed assets
generally have a life of more than one year, are acquired for use in the
operation of the business, and are not intended for resale to customers. Assets
differ from inventory items since you use them rather than sell them.
parent asset
A parent asset has one or more subcomponent assets. First you add the parent
asset. Then, you add the subcomponent asset and assign it to the parent asset
in the Additions form. You can change parent/subcomponent relationships at
any time.
prorate date
Oracle Assets uses the prorate date to calculate depreciation expense for the
first and last year of an asset's life.
recoverable costs
the purchase price excluding VAT. It does not include the element of non-
recoverable VAT.
source line
Shows details of the supplier, the invoice and purchase order and the
project/grant if applicable.
tag number
Your own departmental reference number.
1. Create mass additions – sweeps all invoice data re ticked track as asset items into
a holding area called mass additions within the fixed asset module.
2. Automatic Processes:-
• Assets are categorised (using SOF’s) to allow appropriate analysis
• Asset key is assigned to an asset (required for departmental analysis)
• Default location is assigned
• Default responsible employee is assigned
• Depreciation transaction code is assigned
4. Process mass additions – sweeps assets into the fixed asset register
6. For items omitted to be ticked by departments a manual entry can be carried out.
7. If departments have items that for some reason not previously been included in the
fixed asset module these, once collated, can be uploaded by central finance. Please
contact the Fixed Asset section.
8. Retirements
9. Disposals
10. Revaluations
• A further manual journal is required to create the Deferred Capital Grant and to
strip out the original income (grant received) from the Income and Expenditure
account:
DR U/Dept/0000/ZZXA/Transfer to Deferred Capital Grant – Funding Council (HCAB)
CR U/Dept/0000/ZZXA/Deferred Capital Grant – Funding Council (WNAA)
• A further manual journal is required to create the Deferred Capital Grant and to
strip out the original income (grant received) from the Income and Expenditure
account:
CR U/Dept/0000/SOF/Deferred Capital Grant – Research Grants (e.g. WNAB)
DR U/Dept/0000/SOF(in the Z range)/Transfer to Deferred Capital Grant– Research Grants (egLZEC)
Depreciation
Basic Process
Creates a charge to the Income and Expenditure a/c and creates a corresponding
balance sheet Land and Buildings depreciation entry
DR U/CC/0000/Z range/I & E Depreciation (eg FBAA)
CR U/CC/0000/Z range/Balance Sheet depreciation (eg PABA)
If the asset was financed by a grant then:-
A further journal is required to release an amount equal to the depreciation from the
Deferred Capital Grant into the Income and Expenditure Account:
DR U/Dept/0000/Z range /Deferred Capital Grant (eg WNAA)
CR U/Dept/0000/Z range/ Deferred Capital Grant Release (eg HCAA)
The export function can be used to export data from a query into Excel. First, query the data.
Step 1
2. Via MS Internet Explorer, the lines are exported to MS Excel, where the data will
appear automatically.
3. Select Save As… from the File menu and save the spreadsheet with a Filename of
your choosing and a File Type of Microsoft Excel Workbook.