Trade-Ins - Procedures

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1. Purpose and Objectives

The purpose of these procedures is to outline the process of managing a trade-in of University assets to acquire new assets from suppliers external to the University.

2. Definitions, Terms, Acronyms

ChartField - a UniFi term used to describe accounting segments in a multi-dimensional Chart of Accounts.

Recipient Created Tax Invoice (RCTI) - a tax invoice that is issued by the purchaser of the goods and/or services rather than the seller, whereby the purchaser meets the criteria as prescribed by the ATO.

Trade-In – occurs whereby the item has been traded in to a body/individual external to the University.

3. Procedures Scope/Coverage

These procedures apply to all University staff involved in the trade-in of assets.

4. Procedures Statement

Special procedures apply where the purchase of an asset involves a trade in. In order for the trade-in to be recognised, organisational units must ensure that the tax invoice from the supplier itemises the details of the trade-in including the trade-in value of the traded-in asset and the value of the new asset. The organisational unit must also ensure that the GST treatment is appropriate.

5. Responsibilities

Where it is possible to arrange a trade-in of existing equipment and the trade-in price is assessed by the Head of the organisational unit to be the most advantageous price for the University, this shall be an acceptable method of disposal.

The decision to trade-in is to be made bearing in mind:

  • possible delays in disposal by other means;
  • difficulties in finding another purchaser; and
  • any special purchase price on new equipment offered by the supplier.

All trade-ins must be approved by the Head of the organisational unit concerned.

Where a trade-in is negotiated with a supplier, the organisational unit should ensure that the amount of the trade-in is clearly stated on the supplier's invoice as well as the full value of the new asset.

The organisational unit and the supplier must agree in writing that the supplier will provide a RCTI.

The trade-in amount, whether deducted from the purchase price of the new equipment or received separately by way of a supplier’s credit note, should be recorded separately in the General Ledger.

Items recorded on the Asset Management module that are traded-in are to be retired from that system.

6. Trade-in Process

The following steps should be taken to facilitate a trade-in:

  • Agree with the supplier in writing that they will provide a RCTI.
  • Ensure that the supplier clearly highlights the old item and its trade-in value on the invoice as well as the full purchase price of the new item.
  • Raise a requisition/purchase order to the appropriate expenditure category for the new item and its full purchase price.
  • Upon receipt of the reduced cost invoice, Accounts Payable will apply the difference (proceeds for trade-in) to account 155999, allocating the GST as per the RCTI.
  • Submit an Asset Disposal Form to the Assets Unit within FBS – select “Trade-In” as the Asset Disposal Type.
  • Transaction details for the proceeds of trade-in should be provided to the Assets Unit within FBS on the Asset Disposal Form.