Fixed assets

General Guidelines

According to the regulation on government accounting, KI must establish and maintain a register of their inventory and fixed assets. The asset register should contain information that allows for the identification of the asset. The register should include assets with an acquisition value that corresponds to at least the amount that KI applies according to the regulations and general advice to the Regulation (FÅB - 2000:605). Inventories that are considered to be prone to theft should also be registered in the register.

For an asset to be recognized in the balance sheet, it must meet the criteria to be classified as an asset:

• It must have been acquired for permanent use.
• It must have an economic lifespan of at least three years.
• It must have an acquisition value exceeding SEK 40,000.

It must also be likely that the asset will provide future economic benefits or serve as a service potential for the authority.
Future economic benefits refer to an asset's ability, alone or in combination with other assets, to contribute directly or indirectly to revenue or cost savings for an authority. An example could be the purchase of an in-house analysis equipment instead of sending samples to an external company for analysis. In this case, economic benefits arise in the form of cost and time savings.

An asset's service potential is its ability, alone or in combination with other assets, to contribute directly or indirectly to achieving established goals. Government assets are often not intended to generate economic benefits, but rather, the value of the assets lies in the services produced using the asset.

Tangible Fixed Assets

Tangible fixed assets are divided into several items in the balance sheet and may include:

• Machinery, equipment, installations, etc.
• Ongoing new installations

The acquisition cost consists of the purchase price (excluding any discounts and customer losses), which includes directly attributable costs to place the asset in position and make it usable in accordance with its intended purpose. Examples of such costs may include:

• Preparing the site or area for the installation of the asset
• Delivery and handling
• Installation
• Consulting services and costs for internal staff
• Dismantling and removal of the asset and restoring the site if a planned reservation has been made in the balance sheet (BS)

Note! However, subsequent costs related to the asset, such as regular service and maintenance, should not be included.

The basic principle is that each individual asset should be valued separately; however, the principle of similar assets or a natural connection (also called a functioning unit) is applied. This means that larger acquisitions of these assets are recorded as a fixed asset if they exceed the threshold of 40,000 SEK, even if each individual asset is of lower value.

An example of a similar asset could be a large acquisition of computers, and an example of a natural connection could be a furnished conference room (table, chairs, shelves, etc.) or a computer with the current accessories (monitor, keyboard, and hard drive). In the case of renovations of laboratory and office spaces or similar, the investment is considered as a whole.

Decommissioning/Sale of Fixed Assets and Inventory

If KI has assets that are no longer needed in its own operations or have become unusable, it is allowed to sell/decommission the asset according to regulation (1996:1191). An asset, such as an office machine, laboratory equipment, or other asset-based equipment, must be shown to be unnecessary within any department at KI or completely unusable. This means that the selling institution must investigate if any other institution within KI can make use of the asset before any potential sale can occur (Here you place an advertisement within KI’s Buy and Sell Laboratory Equipment and Office Supplies | Staff (ki.se)). Despite this, KI must be very restrictive when it comes to selling assets to external parties. In these cases, an agreement must also be signed by both parties. According to the President’s decision and delegation regulations, a decision on the disposal of equipment must also be made by the University Director.

Regarding inventory, KI does not allow the sale of equipment such as computers, phones, or tablets. KI also refrains from donating equipment to external parties, as it cannot ensure how the equipment will be used.

When selling an asset, a market price must be estimated by checking the cost of a similar used item and using it as a benchmark for the sale price. The sale must be based on business principles, meaning the administrative unit of the respective institution decides on a second-hand value for the asset, and the buyer cannot be involved in the pricing. The process for pricing must be documented and attached to the verification for the booking. The following questions should serve as guidance for the documentation:

• How has the institution ensured that other departments have been informed about the sale?
• How has the sale price been determined, and what second-hand markets have been checked?
• Who is responsible for answering the above questions?

KI is not liable for taxes on the transaction, and therefore no VAT should be added to the price. When selling to staff, rules regarding taxable benefits must be considered. If the asset is sold at a price below market value, it is considered a benefit for the employee from the first krona. When assessing the price, VAT should also be included, as the employee would likely have to pay VAT if they purchased the asset on their own. However, KI does not need to report or pay any VAT.