Professional Documents
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207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 1 OF 10
CONTENT: This instruction outlines the use, preparation, processing, and routing of Form SA-630, Capital Asset
Change Authorization. The text includes:
1. Glossary
2. Use of Form SA-630
3. Responsibility for Preparation
4. Preparation of Form SA-630
5. Approvals
6. Receipt Action
7. Review of Capital Assets held by AM&RD for Storage or Transfer, or by the Sales Unit for Sale
8. Routing of Form SA-630
1. GLOSSARY:
AI Accounting Instruction
AM&RD Al-Midra & Reclamation Division/NA/SASD
AM Asset Management
BI Budget Item
CEO Chief Executive Officer
DASD Dhahran Area Storehouse Department
ER Expenditure Request
EXCOM Executive Committee of the Company
FAIU Fixed Assets Inventory Unit/FAWIP
FAWIP Fixed Assets & Work-In-Progress Accounting Department
GI General Instruction
IRG Inventory Review Group, MCSD, MCD
JO Job Order
MCD Materials Control Department
MCSD Materials Control Services Division/MCD
MS Materials Supply
NA/SASD Northern Area/Southern Area Storehouse Department
R&DCU Returns & Documents Control Unit/ AM&RD
SR&QC Surplus Returns & Quality Control/R&DCU/AM&RD
SU Sales Unit/DASD
SCMM Supply Chain Management Manual
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 2 OF 10
Form SA-630 is the document for notifying and approving changes in assignment of responsibility for capital
assets.
Proponents wishing to dispose of office furniture and equipment should determine if there is a corporate need
for such items prior to disposal. This should be done in coordination with the respective Office Services
Division.
2.1.2 Includes trade-in of old Capital assets (see SCMM 21.08 and AI 320).
2.1.3 Financial consideration is defined as receipt of money or equivalent which, under the
circumstances and from the viewpoint of good business standards, represents a reasonable
monetary realization.
2.1.4 When it is demonstrably in Saudi Aramco's best interests, e.g., site clearance, the capital assets
may be given to an outside person or agency in return for removal and disposal. Based upon
the salvage value concept, this is considered a disposal for financial consideration, i.e.,
estimated Saudi Aramco costs of removal and disposal equals, or exceeds, potential proceeds.
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 3 OF 10
2.2.1 All proposed actions resulting in abandonment, demolishing, giving away, or otherwise
disposing of Company capital assets without financial consideration when the book value of
any one disposition is $100,000 or more (regardless of salvage value) requires approval of the
Board of Directors or EXCOM. Such approval is also required when the book value of any
one disposition is under $100,000 if the salvage value is not nominal. The President & CEO
has the authority to decide what could reasonably be considered as nominal under the
circumstances. For practical purposes 'nominal' is regarded as assets having salvage value of
$1000 or less.
2.2.2 The President & CEO and each Senior Vice President has authority to abandon, demolish, give
away, or otherwise dispose of Company capital assets without financial consideration provided
the asset has only nominal or no salvage value to the Company and the book value of the asset
is less than $100,000 at the time of disposition.
2.2.3 This categorization includes assets lost or missing, due to known or unknown causes.
2.3.1 Includes assets held for storage and protection only. The assets have potential future use to the
organization requesting storage.
2.3.2 Includes assets held for storage and eventual transfer. The assets have potential future use
within Saudi Aramco.
2.3.3 Includes assets sent to MS storehouse for disposal. The assets have no potential use within
Saudi Aramco and may be auctioned, sold or scrapped. Refer to SCMM 20.04 and Paragraph
2.2 for scrapped items to be disposed of without financial consideration
2.4.1 For direct transfer of assets between departments or locations refer to GI. 207.060.
This action represents a retirement, from the financial records only, of assets which can no longer be
economically used in Company operations. The assets are taken out of service with no intent to
subsequently abandon or dispose of them and they remain in the proponent's custody and control. For
more details about retirement, refer to AI 206.
2.5.1 A memo asset record will remain in the AM and will show on the perpetual inventory program
reports until the time of disposal.
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 4 OF 10
2.5.2 Any subsequent decision to abandon or dispose of retired assets (other than for financial
consideration) is to be considered a disposal without financial consideration. The approval
authority required is based upon the book value of the asset at the time of retirement. The
proponent organization must prepare Form SA-630 specifying the plant, equipment or
buildings involved, and the accounting control number used on the previous Form SA-630
when the asset was retired. The proponent shall secure the signature approval authority level
required for the proposed action and send the original Form SA-630 to FAIU.
2.5.3 A subsequent decision to sell retired assets must follow the approval procedure for disposals
for financial consideration. Refer to Para. 5.
2.5.4 Cannibalizing an asset is treated as a normal retirement for approval authority purposes.
However, the book value of the cannibalized asset is charged to the proponent operating
expense account as direct charge materials instead of depreciation expense or to an inventory
account, if applicable.
The capital asset custodian is responsible for the preparation of Form SA-630. He should also ensure, by
monitoring the relevant asset records, that the transfer or disposal has been correctly recorded to reflect his
release of that asset. For more details, refer to G.I. 207.060.
Preparation of Form SA-630 (Attachment I) is explained below. There is no R&DCU and SU involvement for
a direct transfer between user departments or retirements in place and steps relative to their functions may be
ignored in such cases.
Form SA-630 can be prepared on-line through the Company's electronic forms service. The following letters
“A” through “M” under paragraph 4.1 through 4.4 can be cross-referenced to the sample Form SA-630
(Attachment I).
Prepares Form SA-630 for each asset to be disposed of and submits to R&DCU to decide a disposal
action (See SCMM 20.04). After R&DCU advises originator of the different disposal actions of
multiple assets, the originator collects Form SA-630 sheets according to the disposal action and assigns
sheet number accordingly. In case of multiple assets, originator prepares one sheet only of Form SA-
630 and attaches a list of these assets. In the case of retirement in place, assets disposed of in the past
without documentation, or sent to reclamation via SA-112 form, the originator does not need to submit
SA-630 to R&DCU but proceeds to obtain proper approval.
A Self-explanatory. See also paragraphs 2.1 through 2.5 and 4.2. H of this GI, AI 206 for “Partial
Disposal” and SCMM 20.04 for “Tracking Number”. If action requested is not on this block,
state it in block “B”.
• Explain the reason for action requested. Clarify the type of change action required above.
• If the asset is retired or lost, State it in this block and proceed to block “E”.
• State the fact clearly when the asset disposal or retirement is related to asset safety risk,
unsuitability factors, and inherent defects.
• If the requested action is to cancel or replace a previous action, state the fact clearly and
reference the accounting control number used on the previous Form SA-630.
C In case of partial disposal, indicate the cost of major portion of asset to be disposed of.
E Indicate originator’s name, department, division, mailing address, asset location, responsible cost
center, telephone/fax numbers, and date of preparation.
G The originator must obtain the required signature approvals up to the president & CEO and/or
EXCOM after determining the approval authority level for the proposed action. Department head
is the normal approval level required for transfer transaction.
J When an asset is moved to Sale/Reclamation and/or Storehouse location for sale, storage ,
transfer, or other disposal, the originator must obtain the receiver’s name, signature, job title,
telephone number and date of receipt.
K When an asset is transferred directly to another user and/or location, the originator must obtain
the new user’s department’s name, location, engineering plant number, if any, name and
signature of the supervisor or foreman, responsible cost center, telephone number and date of
receipt.
• After review and inspection of the asset (refer to Paragraph 8.1.2), SR&QC/R&DCU, in
liaison with the SU, place the disposal recommendation in the 'Methods of Disposal' block
and/or indicate the transfer to the nearest Reclamation for storage.
• Enter the storage location to which asset is to be delivered, and confirm the recommendation
by signing in block titled 'Disposal/Transfer Recommended By".
I After receiving the Form SA-630 back from the originator, confirm the disposal or transfer via
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 6 OF 10
J When the originator delivers an asset to the area Reclamation Yard under Form SA-630,
Reclamation Yard sign for receipt in this block. At the time of final disposal, the area
Reclamation Yard R&DCU complete the "Date of Sale/Disposal" block and sign in the space
"Sale/Disposal Verified By"
K When an asset held for storage is transferred to a new user, or returned to the originator, the area
Reclamation Yard R&DCU must obtain the user's department name, location, engineering plant
number, name and signature of the supervisor or foreman who received the asset, responsible
cost center, telephone number and date of receipt. Refer to Para. 7.2
H After liaison with R&DCU under Paragraph 8.1.2 recommends the sale disposal action or the
transfer via Sale or Reclamation location.
I After receiving the Form SA-630 back from the originator through R&DCU, confirm the sale or
transfer (via sale location action when there is no Reclamation Yard and the asset was sent to a
disposal area within SU). SU/DASD signs in the space provided under “SU/DASD Approval”.
J When the originator delivers an asset to a Sale Location under Form SA-630, the originator must
obtain the receiver’s name, signature, job title, telephone number and date of receipt. At the time
of final sale, the SU complete the "Date of sale/Disposal" block and sign in the space provided
under "Sale/Disposal Verified By".
K When an asset held for sale is transferred to the new user, or returned to the originator,
SU/DASD should follow the requirement stated under Para. 7.3. When an asset held for sale can
not be sold, SU/DASD should follow the requirement stated under Para. 7.4
4.4 FAIU/FAWIP
L Indicate on form SA-630 the Accounting Control number assigned automatically by the system.
M Complete the blocks requiring cost and other financial data (those marked “To Be Filled in by
FAIU (FIXED ASSETS INVENTORY UNIT)/FAWIP”.
5. APPROVALS:
Approvals on Form SA-630 with respect to any single item are based on book cost (retirement) or book value
(disposal for financial/without financial consideration), as appropriate, in accordance with the Automated
Approval Authority System. The authority required for multiple items (resulting from a disposal without
financial consideration, retirement, or sale) which is regarded as a single action is based on the book cost or
book value of the total action, rather than the individual items or components.
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 7 OF 10
5.1 The originator obtains the required approval, see paragraph 4.1.G. FAIU will assist originator in
obtaining the necessary information from the CICS Automated Approval Authority System as
applicable.
5.2 A proposal to dispose of capital assets without financial consideration that requires the approval of the
Board of Directors or EXCOM is developed by the custodian department or organization. The
proposal is submitted to the Management Committee by the custodian's Business Line Head who acts
as the proponent. After review by the Management Committee the proposal is submitted to the Board
of Directors or EXCOM for their review and approval. See paragraph 2.2.
5.3 Additional approval is not required when an ER specifies that the disposal of existing capital asset is
included within the scope of the ER, provided the authority for the ER is at least equivalent to that
required by the Automated Approval Authority System. The ER should state the value of the disposal
if it is without financial consideration and the book value exceeds $100,000.
5.4 Subsequent cancellation of an approved action requires the same approval level as was required when
the initial action was approved. When cancelled actions were approved by the appropriate level of
authority, FAWIP must be notified of the cancellation by letter.
5.5 The reinstatement of asset records previously written-off as lost or unlocated but now found is subject
to the original custodian manager approval only. For more detail about reinstatement of capital assets,
refer to AI 206.
6. RECEIPT ACTION:
The originator is responsible for implementing capital assets changes when the approved Form SA-630 is
returned to him. He will obtain a dated signature in the appropriate block titled “To Be Filled in by New User
In Case Of Transfer" or “Equipment Moved to Sale/ Reclamation Location" from the recipient or custodian to
whom the items have been transferred. The receiver's job title, date of receipt, and telephone number should be
shown and include the responsible cost center and engineering plant number for direct transfers.
6.1 For capital assets moved to a sales location, the SU is responsible for notifying FAIU of receipt of
assets for auction and later the final disposition (See AI 208).
6.2 For capital assets moved to Reclamation, R&DCU is responsible for returning the completed Form SA-
630 to FAIU indicating the appropriate action taken.
6.3 Receipt of capital asset into the Auction, Reclamation, or Storage Yard should be accomplished within
60 days from the receipt date of the form, by the originator, from FAIU with the assigned accounting
control number.
6.4 If FAIU does not receive a copy of Form SA-630 that the action is completed by the end of the 60-days
period, FAIU will start the cancellation process by sending follow-up letters to the
originator/department manager informing him that FAIU will cancel the Form SA-630’s control
number after the third follow-up within a week unless FAIU receives a written notice requesting an
extension due to legitimate reason(s).
6.5 FAIU will notify originator, AM&RD, SU and IRG/MCSD/MCD for any canceled SA-630.
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 8 OF 10
7.1 AM&RD and SU should provide FAIU, on a timely manner, with a quarterly list of capital assets held
in Reclamation’s custody and Auction Yard’s custody as authorized by approved Forms of SA-630.
7.2 If assets are marked for storage or transfer development on the Form 630, the assets are only stored by
Reclamation for 12 months unless the originator of the form requests an extension of the storage
facilities before the initial 12 month period has expired. For more details, refer to SCMM 20.04.
7.3 If a capital asset held in MS Storehouse departments for sales development purposes is required by
Saudi Aramco user, the respective Storehouse department prepares an additional Form SA-630
referencing the original Form SA-630, approves the form, obtains the new proponent's signature, and
sends the receipted Form SA-630 to FAIU to amend the Fixed Assets records.
7.4 If a capital asset held in MS Storehouse departments for sales development purposes cannot be sold, the
originator is requested to prepare a new Form SA-630 for scrapping (disposal without financial
consideration) in accordance with the terms of this Instruction. The new Form SA-630 must reference
the accounting control number which was used on the previous (For Sale) Form SA-630.
8.1 For all capital assets changes apart from direct transfers, retirements, and trade-in sales, the routing
Form SA-630 is as follows:
8.1.1 Originator prepares Form SA-630 (paragraph 4.1) with required attachments as applicable. For
direct transfer proceeds according to paragraph 8.6. For retirement in place, trade-in sale, loss,
or donation, forwards the original to FAIU. For all other disposal actions forwards the original
to R&DCU/AM&RD for reference number and inspection to take place.
Note: For all type of disposal action retain a copy and send a copy to IRG/MCSD. MCSD
requires that maintenance/industrial asset number, serial number, and model number,
associated with any equipment, should be reflected on Form SA-630 so that the
related spare parts can be identified and disposed of as necessary. (This applies only
when no similar equipment is in service.)
8.1.2 SR&QC/R&DCU visits the site to determine the physical condition of the asset and, after
liaison with the SU, advises the originator of the disposal action, enters the disposal
recommendation in the 'Methods of Disposal' block and confirms the recommendation by
signing in block titled 'Disposal/Transfer Recommended By". R&DCU then returns the
original to the originator for further processing.
8.1.3 Originator collects Forms SA-630 sheets for assets with similar change action, obtains approval
as per Paragraph 4.1.G, and signed recommendation. Originator will then forward originals
back to R&DCU for verification /approval, and if necessary, transmits them to SU. After
approval, R&DCU forwards originals to FAIU
8.2 If "For Sale", the SU approves the Forms SA-630 appropriately and includes the date and type of
proposed sale. After approval SU forwards originals to FAIU.
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTUCTION NO.
207.050
GENERAL INSTRUCTION MANUAL
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION FAT 9 OF 10
8.3 FAIU reviews the Form SA-630 for completeness of accounting related information and returns it to
the originator if the required information is incomplete. For this purpose, the information of the
following fields: the originator’s tracking, R&DCU reference and associated maintenance/industrial
asset numbers are not required by FAIU. FAIU will proceed to process the Form SA-630 as follows:
8.3.2 FAIU processes the accounting data. If the asset is to be sold, the book value will be calculated
as of the proposed sale date. Any installation and foundation cost is considered part of the
asset’s book value that will be calculated as of the Form’s date.
8.3.3 FAIU reviews the approval of the Form SA-630 and sends back, any forms that may require
additional approval authority, to the proponent to obtain the necessary approval. If the form is
not received by FAIU within 30 days, the assigned accounting control number will be canceled
after sending these follow-up letters, FAIU will provide proponent, AM&RD and SU with a
copy of the canceled form.
8.3.4 For reclamation or sale other than trade-in-sale and sale-in-place, FAIU sends original copy of
the form to the originator to deliver the equipment to Reclamation or Sales Unit, as applicable
(refer to Paragraphs 6.3 and 6.4 for period of delivery). FAIU also sends a copy of the form to
R&DCU or SU respectively.
8.3.5 For trade-in-sale, FAIU sends original copy of the form to SU.
8.3.6 For sale in place, FAIU retires the asset and records the proceeds to the gain and loss account
as applicable. FAIU sends the original form to SU, keeps a copy for reference and sends
another copy with a covering letter to the originator. When the equipment is sold, the originator
will forward the copy to SU.
8.4 For capital assets designated for reclamation or sale under Paragraph 8.3.4, the originator delivers the
asset with the original Form SA-630 to:
8.4.1 The nearest Reclamation Yard when items are to be stored, transferred, salvaged, or scrapped
8.5.1 Provides copy to the originator after confirming the receipt of the equipment.
8.5.2 In case of storing, transferring, salvaging, or scrapping the equipment, sends the original copy
of Form SA-630 to FAIU after confirming the receipt of the equipment.
8.5.3 If the equipment is for sale, sends a copy of the Form SA-630 to FAIU after confirming the
receipt of the equipment. The original copy is also sent to FAIU upon completion of the
disposal action.
8.6 For direct transfers, the asset is physically transferred to the new location and the originator will:
8.6.1 Obtain the receiver’s signature and relevant details on the Form SA-630, retain one copy and
give another copy to the new user.
a. Receive the original Form SA-630 from SU, AM&RD or originator (sales action is
accompanied by Form SA-2949 “Sales Agreement).
b. Record the necessary accounting entries.
c. Send a copy of the Form with sale or disposal action to IRG/MCSD/MCD.
Approved: _________________________
E .D O’BRIEN, Manager
Accounting Policy, Methods
& Systems Department
RAS/ NMK
W/C #M721
SAUDI ARABIAN OIL COMPANY (Saudi Aramco) GENERAL INSTRUCTION NO.
GENERAL INSTRUCTION MANUAL 207.050
Attachment II
ISSUE DATE REPLACES
ISSUING ORG. ACCOUNTING POLICY, METHODS & SYSTEMS DEPARTMENT 01-28-02 06-14-00
APPROVAL PAGE NO.
SUBJECT FORM SA-630 - CAPITAL ASSETS CHANGE AUTHORIZATION
FAT 1 OF 2
The concerned parties should produce all other copies from the Originals during the processing as detailed
on the instruction.