7.2 Asset recording

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Responsibilities
Within entities, accountability for assets will normally be devolved to the business units responsible for the delivery of the service that the asset supports. Asset details should be captured and reported at this level. Individual managers may then monitor and manage the utilisation and maintenance of the assets assigned to their control.

Details of individual assets must be capable of being consolidated and summarised for financial reporting purposes, and for co-ordinated portfolio management. If more than one asset register is used within an entity, common data standards should be employed to assist in consolidating the data.

Recording threshold
Entities are required to set a minimum monetary threshold for the recording and financial reporting of assets. Effort on these activities is then limited to those assets whose value is of significance to service delivery objectives and is above the threshold. This approach can achieve significant administrative savings.

The principal consideration in setting a threshold is whether the omission of those assets whose value is below the threshold would materially affect the quality and usefulness of the information derived. In the absence of a conscious decision to the contrary, entities must maintain an asset register for all non-current physical assets that have a value above a threshold level of $1,000.

Entities may elect to use a higher threshold to meet their individual requirements, but must be prepared to justify their decision.

Portable and/or attractive assets
Some items whose value falls below the threshold level but which otherwise qualify as significant assets should be recorded and tracked either for control or security reasons, or to meet other management requirements. Such items may be classified as 'portable and/or attractive'.

They are recorded in the asset register but excluded from the entity's annual financial statements. (This exclusion does not mean that they are less important to the entity, but only that full accounting treatment is not warranted.)

Core and non-core assets
The terms ‘core assets’ and ‘non-core assets’ are used to distinguish assets that are central to the obligations of Government from those that are not.

An asset is classified as ‘core’ where it is:

• necessary for the ongoing delivery of a service required by Government; and

• publicly owned, and not readily replaced with a private sector alternative; or

• retained for heritage or conservation reasons.

An asset is classified as ‘non-core’ where it is:

• intended not to be replaced if lost because it is not required for the long-term service output of the entity; or

• identified as surplus and awaiting disposal or redeployment.

Grouping of assets
Recording of assets should generally be on an asset-by-asset basis. In some cases, however, it may be more appropriate to record a group of interrelated assets (of which some or all of the components may have a value below the recording threshold). Examples include a major piece of machinery with a number of sub-assemblies, or an infrastructure asset such as a services network. The asset register should record the grouped asset, and identify the individual components.

Unlike assets that are aggregated for convenience (see below), a group of assets attracts particular value because it represents a complete collection (eg a suite of furniture, a set of crockery, or a services network). Loss or removal of one item would significantly diminish the value of the group or collection by making it incomplete. This would apply even if the value of the particular item were relatively low. (This contrasts with an aggregation of assets where the loss or removal of one item may have negligible effect on the total value of the aggregated assets.)

Aggregation of assets
Some entities have large numbers of homogeneous assets which have complementary values (such as library books, or a collection of scientific material). In such cases, the assets may be recorded in aggregate. As for assets that are grouped, this approach will be useful where the value of the components of an individual asset may fall under the recording threshold, but the aggregate value of the ‘asset’ is above the threshold.

Aggregation should not be used for assets that have fundamentally different characteristics as this will result in inconsistent assumptions about useful life and depreciation.

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