Ministry of Education No. MoE/FD/2009 Vientiane Capital, dated 28/06/2004

An equipment item is any instrument, machine, apparatus, or set of articles which meets all of the following criteria:

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  It retains its original shape, appearance, and character with use;
  

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  It does not lose its identity through fabrication or incorporation into a different or more complex unit or substance;
  

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  It is nonexpendable; that is, if the item is damaged or some of its parts are lost or worn out, it is more feasible to repair the item than to replace it;
  

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  Under normal conditions of use, it can be expected to serve its principal purpose for at least one year.
  

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  Original contract or invoice price
  
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  Freight charges
  
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  Import duties
  
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  Handling and storage charges
  
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  In-transit insurance charges
  
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  Sales, use, and other taxes imposed on the acquisition
  
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  Installation charges
  
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  Charges for testing and preparation for use
  
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  Costs or reconditioning used items when purchased
  
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  Parts and labor associated with the construction of equipment
  

Vehicles include all school buses, cars, trucks, vans and motorcycles whose original cost equals or exceeds the capitalization threshold of $2,000, including vehicles acquired through a capital lease.

The accounting and reporting of capital assets is to be done in accordance with the procedures approved by the Department of Finance of the Ministry of Education.

All capital assets are valued using historical cost which is defined as all costs expended by the country to place the asset into service. All hard and soft costs related to the acquisition of land and building should be included. Freight and installation costs related to equipment should also be added to the invoiced cost of the asset.

All donated assets are valued at fair market value as of the date of donation. The donating organization should provide the MOE with this valuation. For assets purchased directly by the Ministry of Education for PES, DEB and Government Schools, the MOE will report the value of the assets at the time the assets are delivered.

A purchased asset other than buildings (see p.3) whose original cost exceeds $2,000 on an individual basis or a donated asset whose fair market value exceeds $2,000 on an individual basis must be included in the property record as a capital asset. Material purchases of like assets must be considered as one individual asset for the purposes of applying the capitalization threshold.

Both the control level and capitalization level may be $2,000. Neither level may be defined at greater than $2,000.

All financial statements and reports, including those submitted to the Ministry of Education, must utilize the capitalization level of $2,000 for consistency.

Article 14. Equipment vs. Supply
The purchase of any item which meets the definition of an equipment item, as described in Section V of this manual, is to be coded for financial statement reporting purposes as an equipment purchase, regardless of whether the cost exceeds the control level established by the AMD, or not. If an item does not meet the definition for an equipment item or its original cost falls below both the capitalization and control thresholds, it is to be coded as a supply item.

Article 15. Depreciation

Capital assets should be depreciated over their estimated useful lives unless they are inexhaustible. PES and DEB and other school agency must use the straight-line depreciation method (historical cost less salvage value, divided by useful life) to compute depreciation of capital assets.

Asset that is a durable nature (nonexpendable) with an expected useful life of at least 1 year, will retain its individual identity (including all component parts) throughout its useful life and, costs $2,000 or more, such items are land, buildings, vehicles, furniture, school equipment and office equipment.

Items that cannot be entirely consumed or used up.

Coding of physical asset is the process of giving identity code number to specific asset for recording and tracking activities for easy management, monitoring and control. Code will describe the asset location, category, classification, description and property number.

For standardization, the following codes must be used for easy tracking and identification of assets. All capital assets must be classified according to category and classification codes. In addition, for application of computerized assets management, the following list of description codes will be used.

To encode and register capital asset with useful life of more than one year such as: land, buildings, vehicles, furnitures and equipment, whether they are purchased or donation from donor organisations, asset detailed information should be encoded into the computerized asset inventory system.

To encode and register non-capital asset with useful life of more than one year such as vehicles, furnitures and equipment, whether they are purchased or donation from donor organisations, asset detailed information should be encoded into the computerized asset inventory system under the non-capital asset category for recording and tracking purposes.

The information also needs to be conveyed to the accounts payable clerk for payment of the invoice.

Land as capital asset has to be included in the capital asset management system. Land detailed information should be encoded in the computerized inventory system as follows:

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  Item No.
  
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  Number of Land
  
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  Land title number
  
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  Code no.
  
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  Type of land (Agricultural land, housing or vacant land)
  
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  Location of the land (village, district, province where the land is located)
  
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  Size of the land (square meter, m²).
  
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  Owner
  
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  Year of use (Start to use in year)
  
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  Funding Source
  
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  User Name
  
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  Organization
  
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  Remarks
  
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  Attachment
  

Buildings as capital asset has to be included in capital asset management system. Building detailed information should be encoded in the computerized inventory system a follows:

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  Building No:
  

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  Number of Building
  
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  Number of class rooms (for school building, report only the total number of classrooms)
  
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  Type of building (class rooms, laboratory, library, canteen, guest house, campus, office, etc.)
  
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  Code
  
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  Location (village, district, provincewhere the building is located)
  
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  Useful Life (from Standard Reccommended Useful Life Table in Chapter XIII)
  
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  Year of construction.
  
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  Year of use (Start to use in year)
  
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    Characteristic of the building (permanent, semi-permanent, temporary)
    
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    Cost of construction
    
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    Funding Source,
    
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    Project Name
    
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    Type of Project
    
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    Remarks
    

Vehicles as capital assets have to be included in capital asset management system, Vehicles detailed information should be encoded in the computerized inventory system a follows:

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  Vehicle Description
  
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  Type
  

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  Plate number (registration number).
  
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  Code
  
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  Brand
  
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  Model
  
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  Color.
  
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  Engine Size (CC or in Liter, Horse power, etc.)
  
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  Engine number
  
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  Chassis number
  
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  Cost
  
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  Year of use (Start to use in year)
  
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  Useful Life (from Standard Reccommended Useful Life Table in Chapter XIII)
  
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  Funding Source
  
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  Project Name
  
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  Project Type
  
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  User Name
  
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  Organization
  
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  Remarks
  
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  Attachment
  

Furniture as capital asset has to be included in capital asset management system, Furniture detailed information should be encoded in the computerized inventory system a follows:

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  Item No:
  
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  Item Description
  
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  Size
  
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  Code
  
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  Material Use (wood,rattan, metal etc).
  

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  Original Cost
  
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  Useful Life (from Standard Reccommended Useful Life Table in Chapter XIII)
  
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  Year of Use (Start to use in year)
  
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  FundingSource
  
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  Manager
  
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  User
  
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  Remarks
  
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  Attachment
  

Equipment as capital asset has to be included in capital asset management system, Equipment detailed information should be encoded in the computerized inventory system a follows:

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  Item Description
  
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  Type
  
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  Serial number
  
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  Code
  
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  Brand
  
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  Model
  
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  Capacity
  
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  Price
  

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  Useful Life (from Standard Reccommended Useful Life Table in Chapter XIII)
  
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  Year of use (Start to use in year)
  

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  Funding Source
  
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  Project Name
  
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  Project Type
  
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  User Name
  
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  Organization
  
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  Remarks
  
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  Attachment
  

The following reports are to be extracted from the property records on monthly, semi-annual and annual basis:

This report lists the capital assets within each major asset category. The report can be ran either monthly or annually. For the capital assets whose original acquisition costs are less than the $2,000 capitalization threshold, it should not be reported on the schools balance sheet of capital asset but to be included in the non-capital asset balance sheet for recording and tracking purposes.

This report lists all asset additions to the property record by asset classification, as well as sensitive items occurring during the preceding month. This is an accounting document and provides an itemized audit trail.

This report lists all retirements/removed from the property record due to abandonment, defective, loss or sale for each asset classification, as well as sensitive items, during the month and provides an itemized audit trail.

This report lists all asset detail by asset classification as of a certain date.

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