Asset Accounting

Hello everyone!

What events have already become critical in 2022 financial year as far as asset accounting concerned? We have noticed at least two.

First, recognition of RFS assets (if your council has not done this yet and planning to do this in this financial year). This issue will probably fall under “found” assets concept. However, how to account for it: as an error under AASB 108 or as a current year income?

Second, dramatic flood events in multiple locations along the eastern coast of NSW. Flood is one of the indicators of impairment under AASB 136. However, do we really need to worry about impairment if all infrastructure assets in NSW local government are accounted for under revaluation model?

To answer above questions and to bring some consistency into the asset accounting approach for other matters across the state, we developed simple, easy to read asset accounting procedures in a form of flow-charts.

The procedures we managed to put together cover following four subject matters:

- Found assets;

- Lost assets;

- Renewals; and

- Impairment.

The above procedures have already been reviewed and accepted “in principal” by auditors of councils with which we have established long business connections. However, before adopting and following them, we still recommend to critically review the procedures and get confirmation from your auditor (see disclaimer).

The procedures can be obtained on this link >> Asset Accounting Flowcharts_VCG_V2

We hope the material will be useful and helpful in dealing with asset accounting issues your council may have. To further facilitate the consistency in the asset accounting approach, we would appreciate feedback or any comments you might have. This will allow for further improvement and updates.

Stay safe,

VCG technical team.