Fixed Asset Management

Transcription

1 Fixed Asset Management Target release Epic Document status Document owner Unscheduled FINERACT-256 DRAFT Cameron Goldie-Scot & Upendo Mollel Designer Developers QA Fixed Asset Management The Fixed Asset Management process covers the life-cycle of an organization's fixed assets including the purchase and recording of the fixed asset register, depreciation of assets, maintenance of assets, through to the disposal of an asset at the end of its life. Fixed Asset Also known as property, plant and equipment, a "Fixed Asset" is a term used in accounting for assets which cannot easily convert into cash. Compared with current assets such as cash or bank accounts, which are described as liquid assets, only tangible assets are referred to as fixed. A typical fully Fixed Asset Management software module contains sub-modules as detailed in the table below:- FIXED ASSET MANAGEMENT Sub modules Scope a) Fixed Asset Register(Basic) Base ability for an MFI to track fixed asset It shows details such as the book value of an asset, purchase details (Price, supplier name, date of purchase etc), status of an asset (sold, broken, stolen etc) and other details necessary for compliance, compute for depreciation and for tax purposes. The fixed assets register should have but not limited to the following attributes; Asset identification or serial number, acquisition date, description of asset, location, class of asset, cost of acquisition, accumulated depreciation,net book value etc b) Fixed Asset Depreciation(Advanced) Depreciation is an accounting convention that allows a company to write-off the value of an asset over time, but it is considered a noncash transaction. This brings additional functionality for GL integration of the purchase, sale and depreciation of fixed assets it has attributes to; Automates the calculation and posting of depreciation Selling or disposing of Fixed Assets and also posts the appropriate GL transactions Out of scope

2 c) Fixed asset maintenance It is the feature to allow for the scheduling and execution of planned and preventative maintenance, as well as recording of unplanned asset breakdowns. Bring Planned and Preventative Maintenance to the system Allow organizations to plan maintenance into the future and schedule preventative maintenance on Assets Goals This document will elaborate the details about requirements of a fixed asset module to MFI institution. The "Fixed Assets Management" module is an add on tool to manage the life cycle of an MFI fixed assets from purchasing, registration, through to the disposal of an asset. And with its advanced features, it will allow to calculate depreciation of an asset. Note Fixed Asset Register is taken as a priority feature first according to the necessity and its frequent use, but the depreciation feature will be taken into account utilizing most of the works and inputs from the fixed asset register. The fixed asset maintenance will not be covered because it is mostly used by non microfinance institution such as manufactures. a) Fixed Asset Register Overview Background and strategic fit While employees may use a specific tool(s) that business uses internally, including but not limited to computers, table, software, or office equipment etc, these resources are ultimately belonging to the respective MFI and must be returned. Without an accurate method of keeping track of these assets throughout their lives and ultimate removal from service, it would be very easy for a MFI to lose control of them. Thus, is an important and a general concern of every MFI institution, regardless of size. Different methods existing today i.e. manual, excel/word documents, or through a separate full fixed asset software package. By integrating this fixed asset management module to Mifos X especially starting with (a) fixed asset register and later (b) fixed asset depreciation, the implementation will enable MFIs to efficiently and cost-effectively track, manage and report these important resources for any MFI. Advantages Reduce the risk of regulatory non-compliance Eliminate ghost assets Track asset assignment and returns with an employee Reduce theft and losses Audit support. Assumption New permissions will be created to allow add, edit, delete or update of a fixed asset. Some GL permission will be modified to allow account for a new fixed asset registered New GL for fixed asset classes will created An asset is interfaced with GL by its asset class. In registering an asset, a system journal entry is created that debits the asset account for the appropriate asset class and credits the expenditure account There will be a financial activity mapping to general ledger account when registering an asset. Requirements # Title User Story Importance

3 1 Create unlimited number of fixed asset 2 Define asset class,example furniture and fixtures, Computer equipment 3 System generate journal entry on registering an asset 4 Allow import and export of fixed asset data 5 Create ledger account for asset linked to each of the asset class 6 Differentiate draft asset, registered, sold or disposed asset. 7 Give a summary of all asset(list view) as well as the detail view of a specific asset As an accountant I want to be able to enter all details of an asset such as name, description, price, etc so as to track all the details of asset when needed As an Accountant/Administrator I want to register asset classes example class "ICT equipment" Type Computer equipment so as during registration one can just pick the asset type to which the asset belong, and also to associate the asset with their depriciation types. As an accountant I want the system create journal entries to the specific fixed asset account automatically on asset registration process so as to associate fixed asset in accounting reports As an accountant I want to import a batch of fixed asset from excel sheets and export them in any format preferable excel. As an accountant/administrator I should be able to create GL account for each of the asset type so as to account for their transactions. (Account linked to financial activity of asset registration). As an accountant I wish to track my unfinished registered asset and be able to edit them and complete their registration when I completed gathering their details, and also be able to track the disposed or sold asset this is because mostly, the asset registration process might have much details that may not be all available at one time. As an accountant I want to see a list view displaying some details of all asset available in the system as well as full details of a particular asset in its detail view Should have 8 Define depreciation methodology As an accountant I want to be able to add depreciation methodology( as straight line or decline balance.) of the asset class so as they will be inherited to the specific assets belong to asset class. 9 Define warranty period and warranty expiry date for each asset As an accountant I should be able to record warranty expiration date for assets with warrant period. Should have User interaction and design Sketches Fixed Asset Home Page

4 Page to Add New Asset Attributes Name Description Notes General data code* Asset code / Asset number Can contain a prefix of an asset name Auto generated Name* Name of an asset Description* Short description of an asset Serial number The MFI's serial number of an asset e.g "Umoja/Comp/003" Class* The class type of the asset, its a dropdown field e.g assets like laptop, printers and desktops can be on the class "IT Devices" Status* The status of an asset, its a dropdown filed e.g available, disposed, broken, owned Model Its the model of any asset, its optional e.g HP Pavilion xt, Acer Aspire One D2015 Supplier name The name of the company/person where the asset was purchased Administrative data Purchase price* The original purchase price of an asset e.g 1,000 Currency* The currency of value amount filled This is the currency for purchase price, current value, annual depreciation e.g USD Invoice number The invoice number of the transaction of the purchase of an asset. e.g INV/2016/0012

5 Current value* This is the current value of an asset at the time of the registering For new asset, the current value = purchase price For old asset, current price = value after depreciation Disposal date The date that asset was disposed Use date picker Years of life Depreciation start Depreciation end Annual depreciation Is the duration in years of a certain class to be disposed The time when the depreciation of an asset starts Is the date when the years of the of that assets ends Is amount of depreciation of an asset for year Location data Use the date picker This should be calcuated automatically after filling the years of life and depreciation start Entered by a user Branch office The office where an asset is resides Drop down of the MFI branches Location Free text User An employee who is using an asset Employees dropdown Installation date Date pick Warranty data Warranty code The code of the warranty Warranty start date Should fetch the original purchase date of an asset Warranty end date The date were the warranty ends Use date picker Warranty period "x" is the number of years Drop down Questions Below is a list of questions to be addressed as a result of this requirements document: Question Outcome Not Doing Fixed Asset Maintenance Reasons: Used mostly by non microfinance institution such as manufactures. And it may unnecessarily elevate scope of the fixed asset module in micro finance. References

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