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E3-E4 MANAGEMENT

Asset Management

5/4/2011 for BSNL internal circulation only

MAINTENANCE OF ASSET REGISTER IN

BSNL

� As per company Act 1956 themaintenance of Assets is statutoryrequirement of the enterprises. Forthis purpose BSNL has prescribed aformat for the preparation of AssetsRegister which is as per Annexurenoted below.


BHARAT SANCHAR NIGAM LIMITED

FIXED ASSET REGISTER

Name of the Circle:

Name of SSA/PAU

Sl

No

V

o

uc

he

r

N

o.

Year

& date

of

Const.

/

Acqui

sition

Assets

Descripti

on

Life

of

the

Ass

ets

Classific

ation

(Account

s Head)

Specif

ication

marks

if any

Loc

atio

n

T

ot

al

C

os

t

Depreciation under Section 350 of

the Companies Act, 1956

Sale /

Transf

er /

Adjust

ment

Total

depreciat

ion

charge /’

claimed

till the

date of

sale

transfer /

adjustme

nt

Prof

it/L

oss

in

sale

s/Tr

ansf

er/a

djus

tme

nt

Written

down

value for

the

purpose

of

section

350 of

the

Compani

es Act.

350 of

the

Compani

es Act.

1956

R

e

m

a

r

k

s

Ye

ar

Current

year

Depreci

ation

Accumul

ated

Deprecia

tion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1

7

1

2

3


� Assets are of two types.

1. Current Assets.

Current Assets are cash in hand, amountreceivable from other organization and Bankbalance etc. and shown in the balance sheetas such.

2. Fixed Assets.

Fixed Assets are infrastructure of thecompany such as land, building, apparatusand plants, computers office machinery andequipment.

MAINTENANCE OF ASSET REGISTER IN BSNL


� Fixed Assets are of Two types.

� - Tangible

� - Intangible

� Tangible assets are those assets having physicalsubstance that can be seen and touched like (Buildings, A&P etc.). These are governed by AS 10

� Intangible assets are those assets having nophysical substance but future economic benefits areexpected to flow from them to the enterprise suchas Goodwill, Trademark, Computer software etc. AS26.




• On formation of BSNL w.e.f. 01-10-2000 all the assets &

liabilities of DTS & DTO were transferred to BSNL. Assets

to the tune of Rs.63000 Crores were transferred on that

date. The value of fixed Assets available in BSNL as on

31-03-2007 is approximately 118 Thousand Crores.and

as on 31.03.2009 is approximately 132000 crores.and as

on 31-03-2010 it was approximately 139000 crores.


MAINTENANCE OF FIXED ASSET REGISTER

• Cost of Fixed Asset: Any item of fixed asset is capitalized atcost. Cost comprises-

- Purchase price- other directly attributable charges such as site preparation,initial delivery and handling cost, installation/execution costs,related professional fee if any- Customs and Other tax and duties are included whereas rebateare deducted there from.


MAINTENANCE OF FIXED ASSET REGISTER.

- Interest & Finance Charges on loans identifiable with a particular

project/scheme are allocated to the respective project. However, on

completion these costs are charged to revenue expenses.

- Administrative & other Overheads

- Common expenditure i.e. expenditure attributable to more than one

scheme/project/asset incurred during the year is to be apportioned

to each scheme/asset.


Maintenance of Fixed Asset Register- contd…

• Classification of Expenditure in BSNL

- Revenue Expenditure

- Capital Expenditure

- Inventory

- WIP

- Fixed Asset


On the basis of activities, the expenditure incurred in BSNL willeither be revenue or Capital. Here we are concerned only aboutcapital expenditure, which is initially booked under Inventory,WIP or directly under Assets. The difference between WIPExpenditure and Fixed Assets Expenditure is that from the dateof booking under Fixed Asset, the depreciation on such Assetsstarts. On the other hand on booking the Expenditure underWIP or Inventory, the depreciation is not started till the transferof such expenditure to Fixed Assets.


Mtce. Of Fixed Asset register contd…

• Treatment of materials supplied for Works:

- Material received at site

- Stores directly received at site

- If the material not used immediately

• Review of Pending Work in Progress



• Treatment of WIP as Fixed Asset:- Certificate of Management- After commissioning of the system expenditure incurred thereafter will be treated as Revenue Expenditure.

• Standby equipment – capitalized • Addition and alterations – capitalized.• Shifting - revenue . • Replacement – capitalized.• Replacement of asset as a whole written off & Expenditure –capitalized.



• Replacement of the part of asset – Ordy Repair – P&L

A/C.

• Asset retired from Active service – TFD to current Asset.

Loss – P&L A/C.

• Asset sold – P&L A/C.

• Liquidated damage- Treatment – Credited to Revenue.



Fixed Assets: Exhibition in Accounts

- Fixed Assets are exhibited in the Accounts under the

following categories:

- Gross Block ( at Historical Cost)

- Depreciation

- Net Block

- Capital work in Progress



• Fixed assets of BSNL are as under:(1) Land(2) Building(3) Apparatus and Plants(4) Cables(5) Lines & Wires(6) MVL(7) Subs.Installation(8) Installation Test Equipment



• Office Machinery & Equipment

• Electrical Fittings

• Electrical Appliances

• Furniture & Fixtures

• Computers

Further categorization of the asset is under GA,Tribal Area

& Rural Area.



• Fixed Assets: Detailed Registers• The Statement of ICAI 1988 suggests that the records of Fixed Asset to contain the following particulars-(A) (i) Description of the Asset

(ii) Classifications ( Head of A/C)(B) Location of Asset(C) Quantity(D) Additions/ Alterations(E) Disposals/ Removals from Asset Register.



(F) Total (C+D-E)(G) Depreciation for the year (WDV)(H) Net value at the end of the year• Registers can be maintained for each category of asset as well as Areas as directed by BSNL

• Identification of Assets: Asset Registers- can be maintained w.r. to Estimate files, Works registers & Management Certificate



as well as work schedules of Civil/Electrical wings.

- In case the asset located at residential premises of officers, the asset

register should indicate

- Petty items of assets with small individual value can be grouped for

recording in the register.

- A&P, Elect.Instt., Furniture & Fitt. And Elect.App. W.r. building.



- Building will be categorized for easy identification

with indication as for operative, admn., staff

quarters, IQ Etc.

- Length of laid cables etc.which could not be verified

physically will be identified w.r.provision in the

relevant PE, Mgt. Certificate & Cable diagram of the

year etc.



- Auditors will verify the registration particulars of each

land & Insurance of Vehicle etc. as shown in asset

register.

- Length of buried & abandoned cables etc. are required

to be shown in the separate asset register until they are

finally disposed off.



- Physical Verification of Asset (Annual)

• De-commissioning of Asset – TFD to Inventory.

• Depreciation – fall in the quality – quantity or value of Asset, Wear

& Tear, efflux of time, obsolescence, fall in market price.

• - why it is provided

- 100% depreciation on petty assets

- Depreciation method in BSNL - WDV.



• Depreciation- Rate of BSNL- Building = 5%- A&P = 15.33%- MVL = 25.89%- Cable = 15.33%- Lines & Wires = 13.91 %- Installation TE = 13.91 %- Masts & Aerials = 13.91%- OME = 13.91 %



- Electrical Fittings = 13.91 %

- FF = 18.10 %

- Computer = 40%

• Calculation of Depreciation

• Pro-rata depreciation

• Depreciation on low cost items



The Asset register will be maintained as per the following

prescribed format:

(1) S.No.

(2) Voucher No./JS no.

(3) Year & Date of const./acquisition

(4) Asset description

(5) Life of the Asset



(6) Classification ( Accounts Heads)(7) Specification marks if any(8) Location(9) Total Cost(10) Depreciation under Section 350 of the Companies Act.1956

- Year- Current Year Depreciation- Accumulated Depreciation



(13) Sale/Transfer/Adjustment

(14) Total Depreciation charge/claimed till the date of

sale/transfer adjustment

(15) Profit/Loss in Sales/transfer/adjustment

(16) WDV for the purpose of Sec.350 of the Companies

Act.’1956

(17) Remarks



• Prescribed format of Completion Certificate in r/o WIP

- S.No.

- Estimate no.

- Name of the Work

- Year of sanction

- Sanctioned Cost

- Date of Completion



- If not completed, reasons thereof

- Expected date of completion/

commencement ( Indicate month)

THANK YOU


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