session 10 asset segment presented by: national treasury
TRANSCRIPT
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SESSION 10ASSET SEGMENT
PRESENTED BY: NATIONAL TREASURY
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ASSET SEGMENT
• New segment on BAS
• Distinguish Assets and Non Assets
• Purpose:• Improved management of assets• Proper recording of expenditure
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BENEFITS: ASSET SEGMENT
• One central list of all capital assets
• Economic classification - Project segment
• Asset segment provides for• Tangible: Physical, Movable/Immovable• Intangible• Non-assets• Assets less than R 5 000• Classes and sub-classes of assets
• Asset items “Breakdown” allowed
• Aligned to categories in AFS/Asset registers
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AUDIENCE QUESTION
• Why should the breakdown facility on the asset segment be utilised if it can be done in the project segment?
• A project consists of different assets with no departmental specific detail and direct link between them. The asset segment breakdown can provide the detail.
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METHODS OF ACQUISITION
• Asset purchasing (buy)
• Asset construction (build)
• Hiring of assets
• Asset transfers
• Asset exchanges
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AUDIENCE QUESTION
• Is the item segment not describing the type of asset?
• No. It only indicates the method of acquisition.
• Where asset is purchased:• Item: Elevator/Escalating systems• Asset: Tangible capital asset: Buildings and
Other fixed structures: Non-residential buildings: Office building
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AUDIENCE QUESTION (CONTINUED)
• Is the item segment not describing the type of asset?
• Where asset is leased:• Item: Lease payments• Asset: Tangible capital asset: Buildings and
Other fixed structures: Non-residential buildings: Office building
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GRAP APPLICABLE TO ASSETS
• GRAP 11 - Construction Contracts
• GRAP 12 – Inventories
• GRAP 13 – Leases
• GRAP 16 – Investment Property
• GRAP 17 – Property, Plant and Equipment
• GRAP 100 – Non-Current assets for sale
• GRAP 101 – Agriculture
• GRAP 102 – Intangible Assets
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ASSET SEGMENT: ANALYSIS
TWO QUESTIONS
• What is the distinction between an asset (capital) and non-asset (current) expenditure?
AND
• Does the transaction relate to an asset, and if so, which category of asset?
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Capital Assets
Inventory/Stock items(Current Assets)
Asset Register items(Non-current Assets)
Current Expenditure(Goods & Services)
Tangible Assets Intangible Assets
Minor Assets(< R5000)
Major Assets(> R5000)
Minor Assets(< R5000)
Major Assets(> R5000)
Current Expenditure(Goods & Services)
Capital Expenditure
Current Expenditure(Goods & Services)
Capital Expenditure
Statement of Financial
Performance(G&S Note)
Statement of Financial
Performance(G&S Note)
Statement of Financial Performance(G&S Note)
Statement of Financial
Performance(Note)
Statement of Financial
Performance(Note)
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SEGMENT CATEGORIES
• Major Asset segment classes• Buildings and other fixed structures • Machinery and equipment• Heritage assets• Biological/Cultivated assets• Specialised Military assets• Software and other intangible assets• Land and subsoil assets
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ASSETS DEFINED
• Asset – Components of definition • Resource• Control• Future economic benefits/service potential• More than one reporting period
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ASSETS DEFINED
• Buildings and other fixed structures
• Buildings• Fixed structures inhabitable by people, animals,
plants or utilised as storage areas
• Other fixed structures• Structures other than buildings i.e. roads, dams,
bridges
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ASSETS DEFINED
• Biological/Cultivated assets• Biological assets are living animals or plants
which are actively managed to effect biological transformation
• Machinery and equipment• Mechanical or electrical appliances, including
furniture, utilised in execution of tasks
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ASSETS DEFINED
• Land and subsoil assets
• Land excludes
• Improvements or
• Cost of transfer of ownership
• Subsoil assets proven reserves of oil, mineral and ore
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ASSETS DEFINED
• Intangible assets
• Identifiable
• Non-monetary asset • Without physical substance
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INTANGIBLE ASSETS DEFINED
• Identifiably criteria: • Capable of being separated and dealt with
individually• Arises from contractual rights, excluding rights
granted by statute
• Distinguish goodwill and intangible• Goodwill – payment in anticipation of future
economic benefits from assets that cannot be individually identified
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INTANGIBLE ASSETS DEFINED
• Assets incorporating tangible and non-tangible features: Exercise judgement to assess which element is more significant
• Knowledge may result in physical asset. Physical substance secondary to knowledge embodied in asset
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AUDIENCE QUESTION
• The department has developed software utilised by Land and Quantity surveyors, how is this classified in the asset segment?
• Allocated to following asset class– Item: Inventory/Compensation of Employees– Asset: Intangible asset
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ASSETS DEFINED
• Heritage assets• Assets that have unique cultural, environmental,
historical, natural, scientific, technological, or artistic significance for the benefit of future generations
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AUDIENCE QUESTION
• Are maintenance, repair and running costs allocated to assets in the asset segment and if so why?
• Yes, in order to identify the asset and track accumulated expenditure on that asset/group
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EXAMPLE ALLOCATIONS
• Repairing a standalone air-conditioner
• Allocation• Item: Contractors: Maintenance of Equipment• Asset: Tangible capital asset: Machinery and
Equipment: Other machinery and equipment: Building Air-conditioning system
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EXAMPLE ALLOCATIONS
• Buy a truck to be used in construction of a community centre
• Allocation• Item: Purchase/Construction Capital assets:
Machinery and equipment: Transport equipment: Trucks
• Asset: Tangible capital asset: Machinery and Equipment: Transport equipment: Trucks
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EXAMPLE ALLOCATIONS
• Permit issued for a hiking trail in a Provincial Park
• Allocation• Item: Sales: Goods and Services: Administrative
Fees: Hiking Trails• Asset: Non-assets related
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EXAMPLE ALLOCATIONS
• The department is constructing a dam utilising consultants
• Allocation• Item: Consultants and Professional Service:
Engineering Civil• Asset: Tangible capital asset: Other Fixed
Structures: Water Dams
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EXAMPLE ALLOCATIONS
• The department is constructing a car park from own account?
• Allocation• Item: Inventory/Compensation of employees• Asset: Tangible asset: Other fixed structures:
Car Park
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EXAMPLE ALLOCATIONS
• The department transfers funds for asset construction to a municipality
• Allocation
• Item: Transfers and Subsidies
• Asset: Non-asset
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AUDIENCE QUESTION
• What asset allocation should be used for a payment of a Travel & Subsistence advance?
• Non-asset – No resource controlled, no future economic benefits/service potential
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ASSET SEGMENT SUMMARY
• Provides for details of asset classes
• Eliminates duplication in Item Segment
• Allows for capturing of own account transactions
• Alignment with the Asset Management Guide
• Not Asset Register
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For any additional questions or issues for clarification, please contact the National Treasury SCOA Technical Committee at:
• Call centre: (012) 315 5311
• E-mail: [email protected]
• Website: http://scoa.treasury.gov.za