SCOA DISCUSSION ON INVENTORY & CONSUMABLE
SCOA DISCUSSION ON INVENTORY & CONSUMABLE
NATIONAL / PROVINCIAL FORUMS
Presenter:
SCOA Technical Committee
|
February 2017
Overview
•
Background
•
Key Changes in SCOA
Policy decision
Illustration
•
Discussion and future interactions
2
Background
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Stationery and printing used for office use should be classified as consumables.
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Background
continued
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Key Changes in SCOA
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Capital assets bought for distribution are categorised as ‘Assets held
for Distribution’. Assets held for distribution are current assets which
are expected to be consumed within the department’s operating cycle
by distributing them to end users, whereas the capital assets bought
for office use are expected to be used for more than one year.
Therefore the separate classification has to be maintained.
Key Changes in SCOA
continued
6
Illustration
Assets purchased for dual purpose:
1
2
3
Key Changes in SCOA
continued
7
Illustration Assets purchased for dual purpose:
5
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Discussion and Future Interactions
1.
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The discussion focuses on the classification and definition of inventory and consumables within the SCOA framework, with key policy decisions and proposed changes highlighted. The presentation delves into the criteria for categorizing items, such as dual-purpose assets and capital assets, impacting departments' operational cycles. Detailed illustrations and examples clarify the significance of the modifications to enhance transparency and accuracy in financial reporting.
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Presentation Transcript
SCOA DISCUSSION ON INVENTORY & CONSUMABLE NATIONAL / PROVINCIAL FORUMS Presenter: SCOA Technical Committee| February 2017
Overview Background Key Changes in SCOA Policy decision Illustration Discussion and future interactions 2 2
Background Inventory and consumable definition: Inventory/Consumable SCOA classification is linked to the principles contained in the Modified Cash Standard (MCS) Inventory encompasses those goods purchased / produced and held specifically for executing the service delivery mandate of the department. Stationery and printing used for office use should be classified as consumables. Consumables are items that are used and replaced on a regular basis; capable of being consumed, destroyed, wasted, discarded or spent; that are in contrast to durable items that can be used repeatedly over a substantial period; and that are not directly linked to the service delivery needs of a department. 3 3
Background continued Inventory and consumable definition: Proposed changes to the definition from the 2017/18 fin year The definition of inventory has been improved to include printing paper and other related stationery purchased by Departments for the purpose of printing workbooks for learners, patient files, or other face value forms related to their mandate, to be classified as inventory. 4 4
Key Changes in SCOA Proposed Policy decision: Current items, except purchases of capital assets, bought for dual purpose should be classified as inventory. Capital assets bought for distribution are categorised as Assets held for Distribution . Assets held for distribution are current assets which are expected to be consumed within the department s operating cycle by distributing them to end users, whereas the capital assets bought for office use are expected to be used for more than one year. Therefore the separate classification has to be maintained. 5 5
Key Changes in SCOA continued Illustration Assets purchased for dual purpose: Name of Department Item Description SCOA Allocation Limitation and Impact on BAS (relating to this transaction) INVENTORY:LEA RNING AND TEACHING SUPPLIES MATERIAL INVENTORY:LEA RNING AND TEACHING SUPPLIES MATERIAL INVENTORY:LEA RNING AND TEACHING SUPPLIES MATERIAL Department of Education Workbooks and school stationery Learning and Teaching Support Materials (LTSM) Workbooks for High School Consumable Items not available on the department s database 1 Department of Education Printing Paper Consumable Items not available on the department s database. 2 Department of Education Printing Paper For use by Department s officials Consumable Items not available on the department s database 3 6 6
Key Changes in SCOA continued Illustration Assets purchased for dual purpose: Name of Department Item Description SCOA Allocation Limitation and Impact on BAS (relating to this transaction) INVENTORY:ASSE TS FOR DISTRIBUTION Department of Education Computer Equipment with value > R5000 each Computer Equipment with value > R5000 each Distribute to the Schools Current asset 5 Department of Education For administrati ve use in Department s offices PURCHASE OR CONSTRUCTION OF CAPITAL ASSETS Capital Asset 6 7 7
Discussion and Future Interactions 1. 2. Selective distribution implemented. A department should send a motivation to the OAG to obtain approval for items that qualify to be consumables to be classified as consumables. 8 8
