Acquisition and Accountability of Fixed Assets (SOP)

Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Davinia Munroe
Review date: 2025-08-20
Next review date: 2026-08-20

This SOP applies to the Administrative Department, the Financial Department, the Accountant, and the Chief Financial Officer (CFO).

1. Purpose

To outline the step-by-step procedures for the procurement, receipt, recording, tagging, and registration of fixed assets in compliance with the Fixed Asset Capitalization Policy (FIN-005).

2. Scope

This SOP applies to the Administrative Department, the Financial Department, the Accountant, and the Chief Financial Officer (CFO).

3. Related Policies

Fixed Asset Capitalization Policy (FIN-005)

4. Roles and Responsibilities

Administrative Department: Responsible for procurement, physical receipt, fixed asset tagging, and maintenance of the Fixed Assets Register.
Financial Department (Accountant): Responsible for verifying documents, recording fixed asset purchases and donations, and initiating vendor payments.
Chief Financial Officer (CFO): Responsible for final review and approval of capital expenditures, and determining the fair value of donated assets.

5. Procedure: Acquisition of Fixed Assets (Purchase)

Step	Action	Responsible Party	Documentation / Notes
5.1	Procurement	Administrative Dept.	Initiates the purchase request process.
5.2	Receipt of Invoice	Administrative Dept.	Receives the official vendor invoice.
5.3	Document Verification	Administrative Employee	Verifies the invoice against: Internal Purchase Request (IPR), Original Official Vendor Invoice, Receiving Report, and Contract (if applicable).
5.4	Submission to Finance	Administrative Employee	Submits the complete package of supporting documents to the Financial Department.
5.5	Expenditure Approval	CFO	Reviews the invoice and supporting documents, initials the invoice to indicate approval for capitalization and payment processing.
5.6	Accounting Entry	Accountant	Records the purchase in the accounting system: Debit Fixed Assets / Credit Accounts Payable (Vendor).
5.7	Payment Initiation	Accountant	Initiates the payment process to the vendor.
5.8	Journal & Approval	Accountant & CFO	The Accountant posts the journal voucher, attaches documents, signs, and sends to the CFO for review and final approval signature.
5.9	Tagging & Registration	Administrative Dept.	Receives a copy of the Receiving Report and updates the Fixed Assets Register and prepares/affixes identification tags.
5.10	Follow-Up	Accountant	Confirms with the Administrative Department that tagging and registration (See Fixed Assets Identification Procedures and Fixed Assets Register Procedures) have been completed and reports any delays to the CFO.

6. Procedure: Receiving of Donated Fixed Assets

Step	Action	Responsible Party	Documentation / Notes
6.1	Receipt & Report	Administrative Dept.	Receives the donated asset and prepares a Receiving Report of the donated fixed assets.
6.2	Fair Value Determination	CFO	Determines the Fair Value of the donated asset and documents the valuation methodology.
6.3	Submission to Finance	Administrative Dept. & CFO	Submits the Receiving Report (with determined Fair Value) to the Accountant.
6.4	Accounting Entry	Accountant	Records the donated asset: Debit Fixed Assets / Credit Other Revenues (Donations) or Equity (Additional Paid-In Capital), based on the donor (non-shareholder vs. shareholder).
6.5	Journal & Approval	Accountant & CFO	The Accountant posts the journal voucher, attaches documents, signs, and sends to the CFO for review and final approval signature.
6.6	Tagging & Registration	Administrative Dept.	Retains a copy of the Receiving Report to update the Fixed Assets Register and prepare/affix identification tags.
6.7	Follow-Up	Accountant	Confirms with the Administrative Department that tagging and registration (See Fixed Assets Identification Procedures and Fixed Assets Register Procedures) have been completed and reports any delays to the CFO.

7. Review and Revision

This SOP will be reviewed annually by the Finance and Administrative Departments to ensure continued efficiency and compliance with the Fixed Asset Capitalization Policy.