Presentation is loading. Please wait.

Presentation is loading. Please wait.

Fixed Assets Management. Purchase/Built Record in asset register Depreciate Scrap Fixed asset process.

Similar presentations

Presentation on theme: "Fixed Assets Management. Purchase/Built Record in asset register Depreciate Scrap Fixed asset process."— Presentation transcript:

1 Fixed Assets Management

2 Purchase/Built Record in asset register Depreciate Scrap Fixed asset process

3 Non - monetary assetsTangible assets Agriculture Biological assets/agricultural produce Inventory Held for sale Used/sold in 12months PPE Used for more than 12months Used to produce goods/services Investment property being constructed Investment property Land/buildings not occupied by owner Held for capital appreciation Intangible assets Identifiable asset without substance Can be seperated/divided from entity & sold,l icensed, rented or exchanged Arises from legal or contractual rights OVERVIEW

4 PPE (GRAP 7) No need to recognise HA If recognise- apply disclosure requirements/may apply measurement requirements Heritage Assets Carrying amount –cost- acc.depr.- acc. impairment loss Class of PPE Cost –cash or fair value Depreciable amt – cost – residual value Impairment loss – carrying amt – recoverable amt Residual value – current estimate of asset s value at end of its life less disposal costs Definitions Future economic benefits Cost/fair value can be measured reliably Recognition Purchase price Direct costs (location) Initial estimated removal, dismantling & restoration costs Elements of cost Cost model Revaluation (by class not individual asset) increase in carrying amt credited to revaluation surplus Measurement after recognition Review at least at each reporting date Residual value & useful life On disposal No future economic benefits De-recognition

5 Legislative Requirements (IFRS/SA GAAP/GRAP) IAS 16 (AC123) GRAP 17 Property Plant & Equipment GRAP 103 Heritage Assets IAS 17 (AC105) GRAP 13 Leases IAS 23 (AC114) GRAP 5 Borrowing costs IAS 36 (AC128) GRAP 21/26 Impairment of Assets IAS 38 (AC129) GRAP 102 Intangible Assets IAS 40 (AC135) GRAP 16 Investment Property IFRIC 1 (AC434) IGRAP 2 Changes to existing decommissioning, restoration & similar liabilities IAS 41 (AC 137) GRAP 101 Agriculture IFRIC 5 (AC438) IGRAP 4 Rights to interests arising from decommissioning, restoration & environmental rehabilation funds SIC 32 (AC 432) GRAP 102 Intangible assets

6 Key Areas of focus 1.Asset componentisation 2.Major inspection costs 3.Useful lives & residual values 4.Impairment 5.Derecognition 6.Decommissioning & restoration 7.Asset tagging 8.Asset verification 9.Asset movements 10.Scrapping of assets

7 COMPONENTISATION OF ASSETS Valve Shell Lining Coating WHY? Different components have different lives

8 COMPONENTS OF A PIPELINE Asset classSub classUseful life Pipeline - SteelShell75 Pipeline - SteelLining - CML50 Pipeline - SteelLining - Epoxy50 Pipeline - SteelLining - HDPE50 Pipeline - Steel Lining - Bitumen25 Pipeline - Steel Coating - Bitumen50 Pipeline - Steel Coating - Bituguard75 Pipeline - Steel Coating - Sintercoat50 Pipeline - Steel Cathodic Protection20 Pipeline - Pre-stressed concrete30 Pipeline - UPVC25 Pipeline - GRP30 Cross Connections75 Carbon Fibre Lining30 Pipeline – SteelValves30

9 FIXED ASSETS POLICY Estimated useful lives & residual values Should be reviewed at least annually Major inspection cost If required regularly, can be capitalised Impairment tests Test annually Derecognition On disposal of asset Decommissioning & restoration Are you liable? Asset verification & movement Ensure existance & location Asset scrapping In line with MFMA, DOA, legislation

10 Life cycle Cradle to grave history on major assets Asset Tagging Uniform asset tagging system Decommission Reviewing our obligations Revalue Replacement value of assets RAND WATER CURRENT PROJECTS


Download ppt "Fixed Assets Management. Purchase/Built Record in asset register Depreciate Scrap Fixed asset process."

Similar presentations

Ads by Google