This accounting policy establishes the method of maintaining fixed asset information and the minimum cost that shall be used to determine the fixed assets that are to be recorded in Zimbabwe Flight Crew Co-operative Society`s annual financial statements.
2. Fixed Asset definition
A Fixed Asset is defined as a unit of property that:
(1) has an economic useful life that extends beyond 12 months; and (2) was acquired or produced for a cost of $1,000.00 or
more. Fixed Assets must be capitalized and depreciated for financial statement or bookkeeping purposes.
3. Maintenance of Fixed Asset List
A Fixed Asset List shall be maintained by the organization’s Admin & Fiscal Officer and shall be reviewed annually by the Board Treasurer and Executive Director at the close of fiscal year, to ensure the document is accurate and up to date. The following information will be captured in an Excel workbook for each item on the Fixed Asset List:
-Assigned asset number
-Description of the asset
-Asset Category (Comp. & Equip./Furniture/Vehicles/Leasehold Improvement)
-The date the asset was placed in service
-The asset’s cost or acquisition value
-The asset’s salvage value, if any
-The asset’s estimated useful life
4. Capitalization thresholds
Zimbabwe Flight Crew Co-operative Society establishes $1,000.00 as the threshold amount for minimum capitalization. Any items costing below this amount should be expensed in Zimbabwe Flight Crew Co-operative Society’s financial statements (or books).
5. Capitalization method and procedure
Fixed assets shall be recorded at historic cost as of the date acquired or, if the cost is not readily determined, at estimated historic costs. Cost shall include applicable ancillary costs i.e. shipping & delivery cost, installation cost, other costs associated to the asset.Tangible assets costing below the aforementioned threshold amount are recorded as an expense for Zimbabwe Flight Crew Co-operative Society’s annual financial statements. Alternatively, assets with an economic useful life of 12 months or less are required to be expensed for financial statement purposes, regardless of the acquisition or production cost.
6. Useful Life
The useful life of an asset is that period during which the asset provides benefits.
Estimates of useful life consider factors such as physical wear and tear and technological
changes that bear on the economic usefulness of the asset. The following chart
summarizes the useful life for each type of currently held property and equipment:
Equipment Useful Life
Computers 3 Years
Office Equipment 5 Years
Furniture 7 Years
Vehicles 5 Years
Leasehold Improvements The shorter of the life of the leasehold improvement or the remaining term of the lease
7. Depreciation Method
The organization has established the straight-line methodology for depreciating all fixed assets. Depreciation will begin in the month the asset is placed in service. Under the straight-line depreciation method, the basis of the asset is written off evenly over the useful life of the asset. The amount of annual depreciation is determined by dividing an asset’s cost reduced by the salvage value, if any, by its estimated life. The total amount depreciated can never exceed the asset’s historic cost less salvage value. At the end of the asset’s estimated life, the salvage value will remain.
8. Record keeping
Invoice substantiating an acquisition cost of each unit of property shall be retained for a minimum of four years.