Finance Demonstration Script :Asset Management

By June 21, 2015

The following scripts describe the elements of functionality that are desired for financial systems. Please refer to Section Finance ,Finance for more information regarding VU’s financial processes
Asset Management
This discussion is about equipment purchases. Other assets would include land and building acquisitions, and building constructions. These other fixed assets are not included in this script as they follow very different processes from equipment purchases. Our focus in reviewing the asset management module is to determine how well the software facilitates tracking the location and responsible owner of moveable assets within VU’s systems. What we are less concerned with is how the software will handle depreciation.
1 Trigger events
The asset management trigger event is somewhat dependent on how purchasing and accounts payable process transactions. In the current system, our trigger is a payment action in Accounts Payable, which causes an equipment disbursement transaction to be recorded in the general ledger. It is this transaction that we key on to identify equipment purchases that become fixed assets. But in a future system, it is possible that the procurement action would be the trigger for a fixed asset. In fact, in the ideal system, we would probably prefer that it be triggered by a purchasing transaction (the beginning of the process) rather than a payable transaction (the middle of the process). A “Purchasing trigger” was assumed when developing the following demonstration script.
1.1 If the final acquisition cost of a capitalizable piece of equipment differs from its originally estimated price, demonstrate how the correct price gets reflected in the fixed assets system.
1.2 Keeping track of multiple funding sources for equipment purchases is very important to VU. A single piece of equipment is frequently funded from more than one type of account. Because of State and Federal reporting requirements, it is sometimes necessary for VU to break down the amounts spent on a single piece of equipment by funding source. Demonstrate that the system can record multiple sources of funding and amounts for a single fixed asset.
2 Information Collection
2.1 Show how the data elements needed for the fixed assets records are captured during the Purchasing/AP process, and are later accessible in the fixed assets system. This information should include, but not be limited to, location (building and room number), department, school, responsible employee, funding sources, and useful life.
2.2 Show how the data elements required for the fixed asset inventory are collected, especially those items not required for the purchase of the equipment.
3 Bar Coding/Tagging
3.1 Does your system have bar code capability? If so, demonstrate its usefulness.
3.2 The University is required to take a fixed assets inventory at least every two years. Knowing that we have approximately 35,000 pieces of equipment, explain how the fixed assets inventory process would work in your system.