(1) The objectives of these procedures are to:
(2) These procedures apply to the Asset Management Rule.
(3) The key features in determining whether an asset exists are:
|Asset class||Definition||Examples (not a definitive list)|
|Land||Freehold land||Campus grounds, farmland|
|Buildings||All Structural components of a property both internal and external of a purchased or constructed building||Education facilities, accommodation colleges, storage sheds|
|Infrastructure||Long-life physical facility or structure essential to the operation of a network or system||Water and sewage supply systems, electricity or gas supply systems, lighting, roads, car parks, footpaths, cabling and communications, retaining walls.|
|Plant and Equipment||Mechanical, electrical or technical in nature||Teaching, research or laboratory equipment, air conditioning units, security cameras, boats, multifunctional devices|
|Computer equipment||Computer hardware||Servers, laptops, desktops, phone networks, AV equipment|
|Motor Vehicles||Any self-propelled vehicle to transport across land, and include commercial or passenger vehicles||Cars, trucks, utilities, vans, motorcycles, ride-on mowers, tractors, trailers, forklifts, quad bikes|
|Furniture and fittings||Moveable items with no permanent connection to the structure of the building or utility||Office furniture, partitioning, shelving, compactus, carpet|
|Heritage and cultural assets||Any relic, work, building, place or landscape with architectural, archaeological, social , cultural, technical, scientific or natural heritage signature||Works of art, rare book, museum items|
|Work in progress||Under construction, or in the process of being constructed, but yet to meet the recognition criteria of being in the location and condition necessary for it to be capable of operating in the manner intended by management||Building under construction, computer equipment yet to be installed, internally generated software under construction, purchased software|
|Software purchased||Software predominately purchased from an external provider without material changes and is not an integral part of computer hardware. This does not include software licences||Call management software, expense management software|
|Internally developed software||Software developed within the University or externally purchased software which has been materially changed||Custom developed software, purchased software highly customised as to differ greatly from the original software|
|Other intangibles||Identifiable non-monetary asset with no physical substance||Water licence|
(4) Acquisitions of assets include those purchased, constructed or donated.
(5) For an asset to be recognised as a non-current asset, it must meet the definition of an asset and the recognition threshold. During the planning phase of an asset acquisition or capital project it is important to ensure all expenditure is able to be capitalised using the guidelines below and seeking advice from Financial Services. Some expenditure may need to be funded from an operational budget.
(6) All non-current asset acquisitions, other than those acquired by way of donation, are to be approved as part of the annual capital budget approved by Council or, if outside the budget cycle, by the Finance Committee or the Vice-Chancellor in accordance with the Schedule of Financial Delegations Rule. The funds for capital expenditure are to be released by the Vice-Chancellor and the Chief Financial Officer.
(7) A business plan, including full costings, is to be prepared and approved prior to the acquisition of non-current assets as part of a project.
(8) Equipment purchases above the recognition threshold and up to $50,000 do not require a business case but must be approved as part of the annual capital budget approved by Council, or by the Vice-Chancellor or Finance Committee if outside the budget cycle in accordance with the Schedule of Financial Delegations Rule.
(9) All non-current asset acquisitions are to be in accordance with the Procurement Policy and Procedures and the Schedule of Financial Delegations Rule.
(10) Asset acquisitions above the asset recognition threshold are to be recorded in work-in-progress using the appropriate capital expenditure natural account.
(11) Financial Services are to be advised of any assets donated to the University as soon as they are received to ensure they are recognised on a timely basis and covered for insurance purposes, where applicable.
(12) Financial Services will capitalise assets when they are in use or in a condition ready for use and record these items on the asset register.
(13) Assets purchased with research funds are to remain the property of the University.
(14) Assets purchased below the asset recognition threshold are to be expensed and may be required to be recorded on the Portable and Attractive Register (see Portable and Attractive Items).
(15) The value of assets can be measured reliably using the following methods:
(16) When an asset is purchased or constructed, the following costs are to be recognised:
(17) When an asset is purchased or constructed, costs which do not directly attribute to getting the asset into the location or condition ready for use are expensed to the Statement of Comprehensive Income.
(18) The following table provides guidance on how to treat expenditure on a purchased or constructed asset: (Click here for table)
(19) Similar or like-natured assets which individually do not meet the recognition criteria are not to be grouped for capitalisation purposes unless they form a network or part of a network.
(20) Each part of a non-current asset which has a significant cost component relevant to the total cost and with materially different useful lives and/or residual value is to be recognised separately.
(21) An asset made up of physical and intangible components will be recognised as a physical asset if the intangible component is integral to the asset and cannot be separately used or disposed. Examples of such assets include:
(22) On recognition of a non-current asset, the useful life of the asset needs to be determined. This is the length of time the asset is expected to be in use by the University.
(23) Any initial expenditure relating to an asset acquisition paid after an asset has been capitalised cannot be added to the asset and needs to be expensed to the Statement of Comprehensive Income unless the expenditure is an asset in its own right.
(24) Expenditure for operating or maintenance of assets is to be expensed to the Statement of Comprehensive Income even if the expenditure is greater than the recognition threshold. Operating or maintenance expenditure includes:
(25) Any expenditure which improves the original operating condition or performance of an asset, reduces running costs, extends the useful life or changes the use of the asset will be capitalised only if it meets the asset definition and recognition criteria.
(26) A major overhaul or refurbishment of an asset can be capitalised and added to the carrying amount of the existing asset if the expenditure meets the recognition criteria for that asset class.
(27) When an asset or part of an asset is replaced, the asset or part getting replaced needs to be derecognised. Any carrying amount is to be recognised as a loss on disposal.
(28) All staff are responsible for the security, care and protection of University assets. Every person who utilises property of the University should do so with the utmost care and consideration and in a manner which ensures the property is subjected to minimum wear and tear and safeguarded against theft and damage.
(29) The safeguard of equipment such as laptops, tablets, mobile phones and cameras is particularly important due to the confidential information they may contain. Steps must be taken to limit the risk of loss or theft, for example, not leaving these items unattended in public places or in motor vehicles.
(30) Each Head of School or Director is responsible for the security and care of all assets in their custody or their staff's custody.
(31) Depreciation and amortisation are the systematic allocation of the cost of an asset over its useful life. It is the consumption of an asset according to its use; it is not a saving for purchase of future assets.
(32) All non-current assets with a cost, or other value, and a finite useful life are to be depreciated (physical assets) or amortised (intangible assets) using the straight-line method, with the exception of assets held for sale.
(33) The depreciable amount is expensed to the Statement of Comprehensive Income on a monthly basis in equal amounts until the cost or value of the asset is fully exhausted, the asset is held for sale or the asset is disposed.
(34) Depreciation and amortisation commence when the asset is first put to use or is held ready for use.
(35) The following asset classes are not subject to depreciation:
(36) The depreciation rates are reflective of the useful life of an asset. The following table indicates the useful life range to be used for each class of non-current assets and the appropriate depreciation /amortisation rates :
|Asset class||Useful life||Depreciation/amortisation rates per annum|
|Buildings||3 to 60 years||1.67% to 33.33%|
|Infrastructure||10 to 60 years||1.67% to 10.00%|
|Plant & equipment||5 to 15 years||6.67% to 20.00%|
|Computer equipment||3 to 15 years||6.67% to 33.33%|
|Motor vehicles||5 years||20.00%|
|Furniture & fittings||7 to 20 years||5.00% to 14.29%|
|Software purchased||5 to 15 years||6.67% to 20.00%|
|Internally developed software||10 years||10.00%|
(37) A review of depreciation rates and ranges is to be undertaken by Financial Services on an annual basis to determine if they are appropriate. Assets fully depreciated but still in use may be reflective of inaccurate useful lives.
(38) All assets recorded in the asset management system (asset register), except those subject to independent valuation in that financial year, and Portable and Attractive registers are to be verified annually by way of a stocktake.
(39) The stocktake process is:
Any impairments or amendments are to be recorded on the Asset Verification Report.
(40) All non-current assets, including work in progress, with a written down value greater than $5,000 are to be reviewed at least annually for impairment during the annual stocktake. When reviewing assets for impairment the asset needs to be assessed for indicators of impairment that would materially reduce the assets recoverable amount. The following are examples of impairment factors:
(41) If a custodian department is aware of impairment to a non-current asset during the financial year, they must advise Financial Services as soon as possible.
(42) The following are examples of impairment:
(43) Impairment to assets highlighted as part of the asset stocktake is to be recorded on the Asset Verification Report.
(44) Financial Services will update the asset register for any impairment identified.
(45) In accounting for impairment losses, an impairment loss is recognised as an expense and a provision for impairment at the asset class level.
(46) If a revalued asset is subsequently written down due to impairment, the loss is first written off against any balance available in the revaluation surplus for that asset or asset class and any amount over the amount in the revaluation surplus is expensed to the Statement of Comprehensive Income as an impairment loss.
(47) For impaired assets, any future depreciation expense is to be calculated on the new carrying amount of the asset over the remaining useful life.
(48) Regular valuations, at least once every 3 years, will be performed for the following asset classes to ensure the carrying amount of the assets reflect their fair value:
(49) Asset classes measured at cost are never to be revalued, even if fully depreciated. Useful lives are to be reviewed each year to ensure they are not fully depreciated whilst they still have service potential.
(50) Independent valuations are to be carried out by a suitably qualified person. All assets within an asset class are to be revalued at the same time.
(51) If indicators exist that the asset class has experienced changes of +/-20% in carrying amounts since the last valuation, an independent valuation is to be undertaken even if it is before the next valuation is due.
(53) The Director, Financial Services is to engage a professional qualified valuer taking into account the expertise required for the asset classes and location of the assets to be valued.
(54) Instructions to the valuers must be in writing by way of a letter or contract for services and must include:
Any material variations to the original instructions are to be confirmed in writing. Email is not considered appropriate for this purpose.
(55) The valuer should provide confirmation of acceptance of the engagement in writing of the terms on which they will be acting. This correspondence should include information on their fees, timing of payments and expense reimbursement arrangements.
(56) Asset information is to be provided to the valuers on a timely basis and should include:
(57) The Director, Financial Services is responsible for ensuring the valuation information returned from the valuers is a true and fair view. The information required from the valuer should include:
(58) Prior to the end of the financial year, each asset class not subject to an independent valuation in that year will be reviewed internally to ensure the assets are still in use and are recorded at fair value. Relevant statistical data is to be used to determine fair value and asset values are to be updated only if the change is material.
(59) Land and Building asset classes are to be revalued at the individual asset level. Infrastructure assets are to be collectively revalued by type of infrastructure.
(60) In accounting for revaluations, any accumulated depreciation is to be netted off to the asset (buildings) or asset class (infrastructure) so the carrying amount is reflected in the asset natural account. Any increments or decrements on revaluation are to be accounted for as follows:
(61) For revalued assets, any future depreciation expense is to be calculated on the new carrying amount of the asset over the remaining useful life.
(62) The useful life and residual value of all assets, with the exception of assets subject to valuation in that year, with a carrying value in excess of $5,000 are to be reviewed on an annual basis during the stocktake.
(63) The remaining useful life of the asset must accurately reflect the expected consumption of the asset.
(64) The residual value is to accurately reflect the expected amount to be received on disposal of the asset.
(65) Any changes to the useful life or residual value of an asset are to be recorded on the Asset Verificaiton Report and updated in the asset register. Future depreciation expense is to be adjusted accordingly.
(66) Adjustments to the useful life are to be made in the earliest year in which a change is deemed necessary. Delays will result in inaccurate depreciation expense being accounted for and could result in an asset being fully depreciated even though it is still in service.
(67) A transfer of an asset is the movement of a non-current asset from one part of the University to another.
(68) Any transfers are to occur at the carrying amount of the asset so the value of the asset to the University is unchanged.
(69) The School or department transferring the asset needs to advise Financial Services of the asset movement.
(70) Financial Services is to verify the movement with the receiving department or school and record the new custodian in the asset register.
(71) Non-current assets are derecognised in the asset register when:
(72) Assets, including portable and attractive items, are not to be gifted, donated or sold directly to any organisation or individual, including UNE academics, staff or students, unless prior approval is sought from the Director, Financial Services. An application must be made to the Director, Financial Services and be supported by the Head of School/Director of the custodian department before the disposal can take place.
(73) Before the disposal of computers or computer equipment, all University information and licenced software (including the operating system) must be removed. All traces of ownership by the University must be removed, including identification and asset labels or tags and engravings that may identify UNE as the original owner. Consult with the Information Technology Directorate for information on how to dispose of information technology equipment.
(74) Motor vehicles are to be disposed of by sale to a motor dealer or by way of auction after receiving quotes for a selling price. To ensure a fair price is being quoted, reference is to be made to appropriate websites detailing current market value, for example www.redbook.com.au.
(75) When an asset is sold and its selling price varies from its carrying value, less any pro-rata depreciation or impairment up to the date of sale, a gain or loss on disposal is recognised in the Statement of Comprehensive Income.
(76) When an asset is disposed of where no consideration is received, any carrying value is recorded as a loss on disposal and recognised in the Statement of Comprehensive Income
(77) Any material costs incurred in selling the asset is to reduce the gain or increase the loss on disposal.
(78) When an asset which was previously revalued is sold or otherwise disposed of, the net increment in the revaluation surplus is to be moved to the accumulated surplus/deficit
(79) An Asset Disposal Authority form is to be completed for all assets disposed, including portable and attractive items (see the section Portable and Attractive Assets). This form is to be signed by the Head of School or Director. For assets on the UNE Asset Register, the form is submitted to Financial Services. For assets on the Portable and Attractive Register, the form is held in the School or Directorate and maintained for audit purposes.
(80) The carrying amount (written down value) of the asset is used to determine who has the delegation authority to approve the asset disposal.
(81) For the physical disposal of assets, other than information technology assets, consult Facilities Management Services.
(82) Assets purchased which do not meet the recognition threshold but are deemed to be portable and attractive are to be recorded on a Portable and Attractive Register maintained within the individual School or Directorate responsible for purchasing the item. See Portable and Attractive Register on the intranet.
(83) Portable and attractive items are non-consumable items which are susceptible to theft or loss due to their nature and attractiveness for personal use or resale. Only items above $300 in value and deemed to be portable and attractive are to be recorded. Examples of portable and attractive times are:
(84) Each School or Directorate is to nominate a person within their area who will be responsible for the register and inform the Assets Officer in Financial Services. The Head of School or Director is responsible for ensuring the register is kept up-to-date at all times.
(85) The Head of School or Director is to ensure adequate controls are in place to safeguard portable and attractive assets from theft, loss and damage.
(86) The register must be updated whenever a portable and attractive item is acquired, transferred to another user or disposed of.
(87) Items on the portable and attractive register are to be disposed of in accordance with this procedure (see the section Disposal of Assets) with the exception of the following:
(88) Each School or Directorate must verify the Portable and Attractive Register annually by way of a stocktake at a time advised by Financial Services.
(89) The process for undertaking the stocktake is:
(90) Financial Services will undertake periodical reviews of Portable and Attractive registers and stocktakes. All documentation requested by Financial Services must be provided in accordance with the instructions of the Asset Officer, Financial Services.
(91) All managers are responsible for:
(92) Financial Services are responsible for:
(93) The Director, Financial Services, pursuant to the University's Asset Management Financial Rule, makes these procedures.
(94) University Representatives must observe these procedures in relation to University matters.
(95) These procedures operate as and from the Effective Date.
(96) The following definitions will apply to this Procedure: