Assets Inventory

Report
N9G “TOOLBOX”
What is the N9G Tool Box?
• The N9G tool box provides the field with helpful information
on a wide range of subjects.
• The tool box provides information to CNIC Regions &
Installations; keeping them “audit-ready” at all times.
• We have provided each of you with a tool box, just make sure
as we provide you a tool monthly, you keep it in your tool box!
Topics that will be filling your Tool Box
Monthly
•
Cost of Goods Sold developed by Inez Holt
November
•
•
•
•
•
•
Cash & Cash Handling developed by Dierk Jaeger
December
Managers Financial Review developed by Connie Milton
January
NAF Personnel
February
•
developed by Sandy New
Contracts developed by Dierk Jaeger
April
Reconciliation developed by Inez Holt
July
Assets Inventory developed by Connie Milton
August
Refreshment Policy
October
Assets Inventory
Examples include:
 Furniture, fixtures and office equipment.
When purchases are made in bulk for like items (example: a set of chairs) and the total cost is $2,500 or
more, regardless of the unit cost, the items may be capitalized and depreciated for MWR Operations only.
 Non-expendable property will be recorded in the general ledger as fixed
assets and capitalized.
 Property and depreciation records will be maintained as subsidiary records
to the general ledger controlling account.
 At least annually, the total value recorded on the subsidiary records will be
reconciled to the corresponding general ledger account balance.
 Each non-expendable item will be given a unique identification number
which shall be permanently affixed with a tag or by some other method, to
identify activity property.
e.g., installation, freight, testing, legal fees to establish title, and any other costs of putting the asset in
the condition and location for use.
 Labor costs are included only if the labor is contracted or a NAF employee was
hired for the express purpose of performing work to create the fixed assets
 Do not include the labor cost of NAF employees working on a fixed asset if the
employees would have been on the payroll regardless of whether or not they
worked on a fixed asset
 Purchase discounts should be applied to reduce the costs; however, interest
charges should not be capitalized
 If the original cost is not known, an estimated value will be assigned. In
determining the estimated value, reference should be made, where possible,
to manufacturers, price lists, cost of similar items, and such other sources of
information as may be available
e.g., installation, freight, testing, legal fees to establish title, and any other costs of putting the asset in
the condition and location for use.
 When the source of funds for the original procurement of property cannot
be determined, it will be considered to have been purchased with
appropriated funds.
 Property on loan will be controlled through use of appropriate issue and
signed receipt documents
Assets Inventory
Asset Master Records - SAP
1. The asset shell contains only the minimum amount of information to actually
save the record in the system. It contains only the asset description,
depreciation settings (useful life) and location (cost center, responsible cost
center, etc.). The asset shell is assigned an asset number by the system so
that it is ready to receive postings into its sub-ledger.
2. Without postings the asset shell has no financial impact on the general ledger.
It is simply an object waiting for an acquisition or transfer.
Asset Master Records - SAP
3. When purchasing an asset using a purchase order, the asset number must be assigned
to the PO item using the account assignment. This will enable the receiving agent to
post acquisition value to the asset sub-ledger through the goods receipt transaction.
4. When the goods receipt is entered, the asset master record will also be updated with
certain information such as quantity and supplier.
5. At this moment the asset shell can be considered a complete asset master record. Also,
at time of goods receipt both the asset sub-ledger and the general ledger are updated with
the acquisition value.
Asset Master Records - SAP
There are 3 types of
Asset Master Records
NAF Assets with value (including
projects, minor property and CF
assets)
UFM assets with value (including
minor property and CF UFM Grant
assets)
APF & Other assets without value
Asset Master Records - SAP
There are various classifications of fixed assets
AIMS/SAP categorizes fixed assets using the following asset classes:
•
•
•
•
•
•
•
•
•
•
•
•
Computers and Related Equipment (Desktops, Laptops/Notebooks, Servers,
Routers, Switches, POS Machines, etc.)
Vehicles (Cars, Trucks, Vans)
Centrally Funded Vehicles
Furniture, Fixtures and Equipment (Work desks, Refrigerators, Freezers, Bar
Equipment, Tractors, Utility Vehicles, Mowers, Golf Carts, etc.)
Buildings (Pools, Field houses, Fitness Centers, Golf Maintenance Sheds, etc.)
Centrally Funded Buildings
Building & Facility Improvements (Renovations, Golf Course Improvements, etc.)
Centrally Funded Building & Facility Improvements
Prepaid Minor Property UFM, Computer Equipment UFM, Fixed Asset Other
UFM
Minor Property
Appropriated Funds Acquired Assets (APF)
OTHER (Assets acquired at no cost from other Navy/government sources
Asset Master Records - SAP
Each of these asset classes has a specific numeric code.
The specific numeric code forms the basis of the asset numbers of the assets
assigned to that asset class.
The asset class determines the general ledger account assignment for the
assets throughout their lifecycle.
These general ledger (g/l) accounts include the balance sheet accounts for
acquisition costs and accumulated depreciation, as well as the g/l account for
depreciation expense and gains/losses on disposal.
The asset class will determine the suggested useful life default values for
assets created under that particular asset class.
Property Accountability and Control
All persons entrusted with government property will be
responsible for the proper financial recording, use, care,
custody and safekeeping.
Government property will not be used for anyone's personal
use.
Property constructed or purchased using non-appropriated
funds will not be diverted to a use other than in direct
support of the FFR purpose for which it was acquired
without the prior concurrence of the commanding officer
and region FFR manager.
Property Accountability and Control
As of October 2004, APFs may be used to offset authorized NAF fixed asset
costs. In those instances when property is purchased with nonappropriated funds to be subsequently offset with appropriated funds,
such property will be recorded on the NAF books at zero cost for inventory
purposes only.
Fixed assets acquired with MWR USA or UFM resources shall be expensed
at the time of purchase and recorded in the NAFI fixed asset records for
inventory and control purposes at zero acquisition value.
These fixed assets are NAFI assets; proceeds from the disposition of these
assets revert to the NAFI
Surplus Property
Surplus/excess items are deemed to be those items which have been
screened in accordance with current disposal regulations.
Items acquired through surplus/excess programs remain APF property and
will be accounted for and controlled as such in accordance with current
regulations and as directed by the program manager.
When no longer needed, these items will be turned in to the nearest
Defense Reutilization Marketing Office (DRMO) with a statement that they
were previously obtained from appropriated funded surplus/excess
sources and that no part of any proceeds from sale or other disposition are
due the returning activity.
Likewise, when the DRMO sells NAF property the proceeds are returned to
the activity disposing of the property.
Depreciation
Depreciation
Depreciation is the allocation of asset acquisition value or cost to present
and future operations on the basis of some equitable and rational
mathematical system.
Although the purchase or acquisition of an asset occurs at one time, the
benefits derived from an asset’s use are received in future periods.
Therefore, an asset’s value or cost must be allocated to the periods that
receive beneficial use.
Depreciation begins the month after fixed-asset acquisition
Depreciation
In the case of large projects, however, use the construction in progress (CIP) account
until the project is either:
•
•
•
Generating revenue
Fully utilized
or final payment has been made
As soon as one of the above three criteria is met, reclassify the CIP amount to the
proper fixed-asset account(s) and begin depreciation over the prescribed lifespans.
For projects generating revenue or fully utilized wherein final payment has not been
made nor is final cost known, estimate expected total cost of the project and record
the amount to CIP with the offset entry to accounts payable.
Then transfer the entire actual and estimated amount recorded in CIP to the proper
fixed-asset account(s) and commence depreciation according to prescribed lifespans.
After final payment is made, adjust fixed-asset and depreciation accounts accordingly.
Computing & Recording Depreciation
Within the DON, all fixed assets will be depreciated by the
straight-line method
Under this method, an equal portion of the cost of the asset is allocated to each
accounting period of use; consequently, this is most appropriate when usage of an
asset is fairly uniform from year to year.
The possibility of a salvage value is ignored and the annual depreciation charge is
computed merely by dividing the total cost of the assets by the number of years of
estimated useful life.
At the end of each accounting period, the following entries will be required to record
depreciation:
Debit - Depreciation Expense
Credit – Accumulated Depreciation
Computing & Recording Depreciation
Depreciation is not recorded as a decrease to the fixed asset account but as an
increase to a contra-asset account, accumulated depreciation.
 The fixed asset account will always show the acquisition cost of the fixed
assets
 The accumulated depreciation account will show the estimated decrease in
value of the fixed assets
 The difference between the two accounts is book value
 Accumulated depreciation is shown on the asset side of the balance sheet
as a reverse of normal amount
All fixed assets are to be depreciated at the activity or general fund level
G&A within the region
Trade In
When one asset is traded in for another, the acquisition cost of the
new asset will be calculated as:
The total cannot exceed the purchase value before trade-in
allowance of the new asset.
Disposition of Property and Records
in lieu of Base Closure
Upon the disestablishment of an activity the property and records thereof
will be disposed of in the following manner unless otherwise prescribed by
the program manager:
1.
Merchandise may be sold to other activities or returned to vendors for
credit, if possible.
2.
Transfer merchandise and property to other activities as prescribed by
the FFR manager. Receiving activities will be responsible for payment of
all expenses incident to packing, crating, and movements of
merchandise of property.
3.
All records and related correspondence remaining after the terminal
audit will be forwarded to the appropriate Navy Region Accounting
Office for subsequent forwarding to the nearest Federal Records Center.
Final Disposition of Residual Assets
Upon final dissolution, all residual assets which remain after the transfer of
monies cited above, including proceeds from sale of property and
merchandise will be forwarded as directed by the applicable program
manager.
Residual assets will be accompanied by a certified copy of the terminal audit
of funds and, if appropriate, by notation of corrective actions taken hereon.
Fixed asset disposal entries are normally based on the book values existing at
the close of the last month of business NAFs existence as a fiscal entity, i.e.,
a fixed asset is not depreciated over the final accounting periods
required for liquidation and closing if normal business
operations have ceased and the fixed asset is no longer being
used or providing service
Retirement of an Asset
When a request to dispose of an asset is received, assets that are in usable condition
must be screened to determine if they can be used by another area. If the asset
cannot be used by another area, the asset will be retired/disposed as follows:
•
•
•
•
•
Trade-ins
Sale (Garage Sale or Sealed Bid)
Donations
Scrap
Lost/stolen
**Follow the rules in CNICINST 1710.3**
Once an item has been retired, the information about the retirement will be
captured, including the type, date and related proceeds or trade-in value if
applicable.
Both groups of assets or portions of single assets may need to be disposed. The
system has the capability of performing partial and mass disposition of assets.
Disposed assets can be returned to service.
Unserviceable Property
Property procured with non-appropriated funds, which has become
unserviceable or excess to the needs of the activity will be disposed of as follows:
(a) Used as a trade-in on a similar item
(b) Sold to or transferred to another FFR activity
(c) If not desired by another FFR activity within reasonable shipping distance or if
it is deemed unfit for redistribution by the FFR Manager, it will be disposed of in
accordance with current Navy and base disposal regulations.
In order to ensure that the NAF receives fair compensation for disposal items the
following methods of selling the assets are authorized
 Garage sale
 Auction
 Sealed bid
Recyclable Material
FFR activities are authorized to use the installation FFR contracting service to
sell non-appropriated recyclable scrap such as aluminum cans, bottles and
newspapers directly to local recycling firms or continue to use the Defense
Reutilization Marketing Office (DRMO).
However, prior to selling locally, get assurance from the servicing DRMO that
no long-term collection or surplus sales contracts are in effect for the
installation for the specific types of recyclables
If a DRMO contract exists for this type of property, the contract takes
precedence until expiration unless exception is granted by the servicing
DRMO
All appropriated recyclable materials shall continue to be processed through
the DRMO.
Inventory Frequency
Inventory frequency will be prescribed by appropriate program managers
As a minimum requirement, non-resale merchandise, consumable supplies, fixed
assets, and property on loan require an annual physical inventory
Cash, prepaid supplies and resale merchandise requires an inventory at the close
of each accounting period. (don’t forget the surprise cash counts!)
The results of the inventory will be reconciled with property records and the
general ledger controlling accounts
Upon the relief of the responsible person, as determined by the program
manager, inventories as set forth above will be accomplished.
Annually, resale inventories, prepaid inventories, consumable supplies & fixed
asset inventories must be verified by a dis-interested party. (3rd party
verification; look for this requirement in the next update to the CNICINST 7000.3)
Most Common Findings
•
•
•
•
Assets are not recorded in SAP
Assets are not tagged with fixed asset numbers as required
Completed projects are not capitalized
Assets have installation property tags but do not correlate to any
numbers in SAP
• Certificate of Dispositions are not prepared or approved by the CO or
his/her designee
• Fixed assets that have been disposed have not been removed from the
SAP asset listing
• No disinterested party inventory verification - (The Regional Internal
Review Officers can be utilized as a disinterested party when available)

similar documents