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
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 1,000.00
Contd
Fixed Assets: Criterion for Inclusion
Tangible Costs greater than ETB 1,000 In operational use With useful economic life over a year Part of capital expenditure
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
Contd
Cost: all amounts paid to acquire and place the assets and ready it for service.
Locally Purchased Foreign Purchases Constructed assets Donated assets Confiscated assets Acquired through other means
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
Government Procurement and Property Administration Agency (GPPAA)
Issue directives for GOFAM Collects information of FA In each government body there is a FAMU, fixed asset management unit
ICC: Initial Comprehensive Count Regular management season
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
Assigning PIN and Marking of FA in Use
Property Identification Number: PIN
Unique identifier given consecutively Numeric, alphabetic, or alpha-numeric
Marking and labeling
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
