The Fixed Asset Policies and Reporting Manual

Fixed Asset Policies and Reporting

2014

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1. Purpose

The Fixed Asset Policies and Reporting Manual is necessary to control and to ensure that all property, plant and equipment (PP&E)/fixed assets are physically present and in service. Further to ensure that all fixed assets are registered correctly and that a fixed asset register is properly kept and reconciled with the general ledger.

2. Scope

This document is addressed to Managers of all the various departments, to Engineers responsible for the movement, transfer and/or disposal of equipment and machinery, to the Finance Manager and to the Fixed Asset Analyst.

3. Responsibilities

The Fixed Asset Analyst is responsible of implementing, maintaining and ensuring that the policies outlined in this document are carried out. The FA analyst is also responsible of making a proper classification, registration and depreciation of the fixed assets in the accounting books. The FA analyst will verify the location of new assets in order to make the proper identification and labeling of the fixed asset. It is also the responsibility of the FA analyst to perform a physical inventory once a year to make sure the asset remains in operation and in the same location defined in the Machinery and Equipment Layout and will also update the layout if needed.

The Engineer who performs the movement, transfer and/or disposal of a fixed asset is responsible of notifying to the fixed asset analyst when any of the actions, previously mentioned, occur. Refer to the Fixed Asset Procedure

Managers of each department are responsible of communicating via e-mail to the fixed asset analyst if there is an investment in process; in addition, Managers are responsible to send to the FA Analyst the approved Investment application.

The FA Analyst is responsible of keeping track of the balances of the approved investments and will notify the managers of any discrepancies as well as the balance of the investment in a period basis.

The Finance Manager is responsible of ensuring that fixed assets are properly recorded and reported on the company’s financial statements and of certifying that the accounting for fixed assets is in accordance with guidelines established in this procedure.

The Finance Manager is responsible of approving the reconciliation/verification of fixed asset balances.

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4. Property, Plant and Equipment (Fixed Assets) – Definition & Classification

Fixed assets are also known as Property, Plant and Equipment (PP&E). They are used directly or indirectly to generate revenue, are held for use by the company and have relatively long lives.

A Fixed Asset is defined as a financial resource meeting all of the following criteria:

* It is tangible in nature.

* It has an extended useful