It’s that time of year when the weather starts to warm up and we start to think about all those jobs that we have been putting off over the winter months. As the school year comes to a close, it’s also a great time to think about the financial hygiene jobs at your school that haven’t been done for a while and could be in need of some TLC.
One of these jobs is a spring clean to ensure your fixed asset register is up to date. Most schools have a significant value of fixed assets including a number of different types of assets, all of which are spread over a large area. It is therefore important that you know exactly what you own and where each item is.
Often when we perform our annual visits to schools we have difficulty finding assets we request to sight for a variety of reasons, including:
- The assets are no longer used by the school or have been disposed of
- The assets have been moved from their normal position to another area of the school
- The assets are off site
All too often we find assets listed on fixed asset registers that no longer exist at the school. These have been previously disposed of but not correctly removed from the fixed asset register. This can result in your school incurring additional annual depreciation on these assets and overstating the value of your assets in your financial statements.
Having an accurate fixed asset register and tracking mechanism for your portable assets is important for a number of reasons, such as ensuring:
- The value of assets in your financial statements is correct
- The assets are available for use and easily able to be found at all times
- You have an accurate record of owned assets for insurance purposes should a disaster occur at your school.
We have seen a number of schools also benefit from a fixed assets policy and register for tracking certain assets that can be easily relocated such as laptop computers and digital cameras. Such fixed assets should be placed under the control of an individual who is responsible for their care and ensuring the location of the assets is always known. When these assets are required to be used by others in the school or offsite, a register of these assets can be maintained so the assets can be signed out and easily tracked.
Periodic stock takes of your fixed assets will help prevent the above issues from occurring, as well as making sure your register is accurate and manageable. Such reviews should also consider whether any of your assets have been damaged and hence impaired in value since the previous review. If so, you should consider reducing the value of the fixed assets in your financial statements accordingly.