Glossary of Terms for Assets

Accumulated depreciation
The total depreciation taken for an asset since it was placed in service. Also known as life-to-date depreciation and depreciation reserve.

Asset key
Each asset is allocated a key on the Asset module. This details the funding source for the asset.

Asset type
An asset is an item that the University owns and uses while providing administration, education and research services. Assets may be one of the following types: expensed, capitalised or construction-in-progress (also see below).

Assignment shows the location of the asset, the details of the employee who is responsible for it (if recorded) and the GL account which the depreciation will be charged to.

‘Books’ shows the financial information about the cost, depreciation and treatment of the asset within the Assets module.

Capitalised assets
Capitalised assets are assets that are depreciated (the cost expense is spread over time in the Financial Statements).

Capital project
This is a project in which one or more depreciable fixed assets are built.

Child asset
(See parent asset below)

Construction-in-progress - via the Project module
Construction-in-progress (CIP) assets are those constructed over a period of time rather than assets bought already finished. Oracle Financials Projects module lets you create, maintain and add to your CIP assets as you spend money for material and labour to construct them. When you finish the assets and place them in service (capitalise them), the system then begins to depreciate them.

Building CIP is managed by the Estates Services Team via the Oracle Financials Projects module and usually has a project code starting with JW.

Equipment CIP is managed by the relevant Department or Divisional Office via the Projects module and the project code will start with the department's main cost centre code i.e. KH.

Date placed in service
This is the calendar date on which an asset could start to be used, often taken as the date of the supplier's invoice for equipment and the date that a building reached practical completion.

Departmental Equipment Listing (DEL)
A comprehensive list of all equipment assets with a value of £25,000 or more.

To depreciate an asset is to spread its cost over the time it is used. Refer to the Depreciation page.

Expensed asset
This is an asset that you do not depreciate, but charge the entire cost in a single period i.e. when the invoice is processed. These consist of equipment, software and vehicles under £50,000 (the University's materiality level for equipment assets) but over £25,000. It is the University's policy to recognise only assets that cost over £25,000 within the Oracle Financials Asset module (including any non-reclaimable VAT) due to the large volume of equipment items that the University purchases.

Fixed assets:

Assets differ from inventory items because they are for use by the asset assignee rather than for sale. Some common examples within the University are:

  • Scientific equipment
  • Research equipment, e.g. an electron microscope
  • Machinery
  • Vehicles
  • Land and buildings
  • Property held for investment purposes
  • Heritage Assets, e.g. paintings, museum collections

Fixed assets are not consumable or stock items.

Fixed assets: Buildings

All capital projects and buildings over £100,000 are defined and managed as Fixed Assets.

Fixed assets: Equipment
Consists of equipment, software, heritage and vehicles over £50,000 (the University’s materiality level for equipment assets). They generally have a life of more than one year, are acquired for use in the operation of the University, and are not intended for resale to customers.

Parent asset
A parent asset has one or more subcomponent assets. First the parent asset is added to the Oracle Financials Fixed Assets module. Then, the subcomponent asset(s) – the children assets – are added and assigned to the parent asset in the Asset module.

A single piece of equipment may be made up of several lines on the same purchase order. Individually each line may be less than £25,000, but if all lines relate to the same asset and in total the lines exceed £25,000, then all these separate lines should be treated as equipment on the Departmental Equipment Listing (see Departmental Equipment Listing above).

Prorate date
Oracle Assets uses the prorate date to calculate depreciation expense for the first and last year of an asset's life.

Recoverable costs
Recoverable cost is the purchase price excluding VAT. It does not include the element of non-recoverable VAT.

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