Download Asset Policy - Dove House School Academy

DOVE HOUSE SCHOOL ACADEMY TRUST
ASSET POLICY
Policy issued March 2017
Approved by Tom Pegler, Headteacher, Annie Benton, Chair of Governors
Signed …………………Tom Pegler & Annie Benton……………………..
Approved at Governing Body on 6th April 2017
Next Review to be March 2018
Introduction
Property, plant and equipment are fixed assets that:
(a) are held for the purpose of the running of the academy; and
(b) are expected to be used during more than one financial year.
This policy will outline the procedures for the recognition and recording of fixed assets
including purchasing, disposals, depreciation and impairment.
All fixed assets above £5,000 in value are recorded in the Asset Register along with the
relevant estimated useful economic life. Other items of lower value may also be included
within the fixed asset register if purchased in bulk or portable items such as cameras.
Recognition and measurement
The academy will recognise an item as a fixed asset and record in the Asset Register where:
(a) It is probable that future economic benefits associated with the item will flow to the
academy; and
(b) The cost of the item can be measured reliably.
Depreciation is calculated from the month of purchase and spread over the useful economic
life of the asset on a straight line basis in accordance with the categories below. There are
no residual values calculated for any asset categories due to the nature of the fixed assets
acquired by the academy.
A barcode sticker will be attached to appropriate items or recorded a bulk lot. eg 30 chairs.
The information shown on the register will include date of purchase, serial number where
applicable, purchase cost including installation where applicable, which department,
category of asset (confirming Depreciation method and Useful Life), supplier and date of
disposal or write off.
Where there are directly attributable costs to bringing any fixed asset to the location and
condition necessary for it to be capable of operating in the manner intended by
management, these are included in the cost of the asset.
Each category has its own Nominal Ledger code within the Balance Sheet and, for recording
depreciation, in the I & E account.
The academy will undertake to check the location of all recorded assets every three years
via scanning and visually checking each department’s assets. Each barcode will record the
department, category of asset and a unique number. A list of bulk assets recorded will be
scanned after a visual check has been made.
Categories of Assets
There are six categories of fixed assets:
Land and Buildings
Land and buildings are separable assets, and the academy accounts for them separately
within this category.
Land is recorded at fair value as at the date of conversion to an academy.
Buildings are depreciated at a rate of 4% p.a. and depreciation started in the first year of
conversion to an academy.
Property Additions
Property additions include additions or extensions to the existing permanent buildings –
typically in the form of a module building.
Property additions are depreciated at a rate of 10% p.a.
Fixtures and Fitting
Fixtures and fittings are depreciated at a rate of 20% p.a.
Depreciation will start in the month of purchase and will not be charged in the year of
disposal if sold before fully depreciated
IT Equipment
IT equipment is depreciated at a rate of 20% p.a. or the length of the lease agreement. If a
bulk order of IT equipment is purchased with together exceeds £5,000 a number of items will
be recorded and depreciated as one item. All IT equipment of any value will be recorded.
Furniture and Equipment
Furniture & Equipment which exceeds £5,000 in value will be recorded and depreciated at a
rate of 33.3% p.a.
Motor Vehicles
Motor Vehicles exceeding the value of £5,000 for a single vehicle will be recorded and
depreciated at a rate of 33.3% p.a.
Purchase and Disposal of Fixed Assets
Academy trusts must seek and obtain prior written approval from EFA for the following
transactions:
• acquiring a freehold of land or buildings
• disposing of a freehold of land or buildings
• disposing of heritage assets beyond any limits set out in the trust’s funding agreement in
respect of the disposal of assets generally. Heritage assets are assets with historical, artistic,
scientific, technological, geophysical or environmental qualities that are held and maintained
principally for their contribution to knowledge and culture, as defined in applicable financial
reporting standards
Other than land, buildings and heritage assets, trusts can dispose of any other fixed asset
without EFA’s prior approval. Trusts must ensure that any disposal achieves the best price
that can reasonably be obtained, and maintains the principles of regularity, propriety and
value for money. This can involve public sale where assets have a residual value.
As per the Finance and Audit Committee Terms of reference, assets purchased under £15k
can be approved by the Headteacher, in excess of £15k must be approved by the governors.
The disposal of assets, which are recorded on the Balance Sheet, are approved by the
Headteacher. Fixed Assets will be charged depreciation from the month of purchase and
will not be charged Depreciation in the financial year of their disposal. The Balance Sheet
will be reduced by the Net Book Value of the asset and the profit /loss made on the
sale/disposal of the asset will be recorded in the Income and expenditure Account in the
financial year to their disposal.
Revaluation (and Impairments)
Revaluation of freehold and long leasehold land and buildings will take place when
considered appropriate or when requested by the EFA. Any gains made on revaluation will
be credited to the relevant reserve.