MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT-MOFED

Training on Fixed Assets and Stock Management

Government Owned Fixed Assets Management GOFAM By Teshome Teklehaimanot

DAY ONE

00 .000.Fixed Assets ‡ Fixed Assets-Definition ‡ Public Property: all property except public money and land ‡ Government Properties ± Supplies consumable within one year costing less than or equal to ETB 1000.00 ± Fixed Assets: usable for more than one year and costing more than ETB 1.

000 ± In operational use ± With useful economic life over a year ± Part of capital expenditure .Contd Fixed Assets: Criterion for Inclusion ± Tangible ± Costs greater than ETB 1.

Fixed Assets Depreciation and RV ‡ ‡ ‡ ‡ Depreciation Nominal value Residual value Book Value: Cost-Accumulated Depreciation .

Depreciation ‡ Cost expiration ± Wear and tear ± Obsolescence. inadequacy ‡ Useful Life ± Expected period of use ± Expected Production Capacity ‡ Residual Value ‡ Depreciable Amount .

± Locally Purchased ± Foreign Purchases ± Constructed assets ± Donated assets ± Confiscated assets ± Acquired through other means .Contd ‡ Cost: all amounts paid to acquire and place the assets and ready it for service.

COA ‡ Codes for Detailed coding of Assets are from 4100 through 4999 (Ethiopian Government Financial Manual) ‡ Fixed Assets ± 4500-4519 construction in process ± 4520-4599 are reserved for property and equipment .

??? Big Point: ‡ Fixed Assets Should be expensed for Budget and reporting purpose ‡ Fixed Assets should be capitalized but not transferred to GL .

Categorization of Property and Equipment ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Vehicle and Other Vehicular Transport Air Craft and Boats Plant and Machinery Military Equipment Building-Residential Building-Non Residential Infrastructure Military Purpose Buildings Furnisher and Fixtures .

CIP Assets ‡ ‡ ‡ ‡ CIP-Building Residential CIP-Building Non Residential CIP-Infrastructure CIP-Military Purpose Building .

Major Maintenance ‡ Shall be considered as capital expenditure ± Life extension ± Capacity enhancement ‡ Beware of overvaluation .

Management Structure Fixed Asset Management Cycle Birth to Death of an asset ± Receipt to Stores ± Issues ± Transfers ± Back to Stores ± Retirement .

Stores Management ‡ Each Public Body needs to setup a used FA stores for items returned from users .

fixed asset management unit ± ICC: Initial Comprehensive Count ± Regular management season .Government Procurement and Property Administration Agency (GPPAA) ‡ Issue directives for GOFAM ‡ Collects information of FA In each government body there is a FAMU.

Valuation ‡ Cost Determination ± Valuation during initial comprehensive count ± Valuation during final disposal .

Initial Comprehensive Count (ICC) ‡ The FAMU should establish the Government Owned Fixed Assets Data as an input. ‡ ICC Activities ± Before Count ± During count ± After Count .

Maintenance of Fixed Assets ‡ FAMU is responsible for protecting and maintaining the fixed assets .

Filing System for the UC and FAR .

Fixed Asset Records ‡ Receipts of Fixed Assets to Stores ± Model 19 ‡ Fixed Assets in Stores ‡ Fixed Assets under Construction ‡ Fixed Asset Information Tracked ± Type ± Location ± etc .

alphabetic. or alpha-numeric ‡ Marking and labeling .Assigning PIN and Marking of FA in Use ‡ Property Identification Number: PIN ± Unique identifier given consecutively ± Numeric.

Annual Physical Data (APC) ‡ Annual Physical Count is a legal requirement ‡ Annual Summary Schedule for end of year reporting .

Valuation of Fixed Assets ‡ Valuation: Determining the cost or value of an asset in use ‡ Actual cost or ‡ Determined in accordance with the directives from MOFED (if actual cost is not determinable) .

Changes to the Register ‡ Newly Received assets to store: Model 19 ‡ Fixed Assets Requested and Issued: new Form .

Accounting Treatment of FA ‡ Accounting Basis ± Cash Basis Accounting ± Modified Basis of Accounting ***??? ± Accrual Basis of Accounting ‡ Transitional arrangement is introduced in the FGE Accounting and Reporting Accounting for Other Assets and Liabilities .

Contd ‡ Entries in the Memorandum (Fixed Asset Books) ± Recording cost of fixed assets ± Recording values of fixed assets returned to stores ± Recording depreciation ± Accumulating and recording costs of CIP .

Sign up to vote on this title
UsefulNot useful