26.3.3 Fixed Assets

Fixed assets shall include tangible fixed assets, intangible fixed assets, investments and other assets. With regard to Fixed Assets, the terms and definitions below are applicable:

1. Real estate: Land, buildings, structures, and usufructs
2. Movable property etc.: Small-sum equipment, fixed assets other than intellectual property rights and real estate etc., and books (Books managed as fixed assets, based on the Accounting Standard Article 42 of the University, shall be defined as the collection of the Library of the Okinawa Institute of Science and Technology Graduate University ("the Library") which acquired and managed by the Library.)
3. Acquisition: Ownership or exclusive use of fixed assets and small-sum equipment (hereinafter referred to as “fixed assets etc.”) from purchase, manufacturing, self-construction, donation, exchange, contribution, etc.
4. Improvement: Implementing the necessary works for the operations of existing fixed assets to increase their value and performance
5. Conservation: Appropriately maintaining fixed assets etc. in accordance with their purposes of use
6. Transfer: Shifting the control of fixed assets etc. among Asset Use Supervisors
7. Disposition: Selling, exchanging, disposing or donating fixed assets etc.
8. Removal: Erasing the records of fixed assets etc. that have been disposed

26.3.3.1 Asset Management Supervisor
“Asset management” shall mean proper management of tangible and intangible fixed assets including acquisition, operation and disposition thereof through understanding the processes and conditions of receipt, payment and maintenance thereof.

26.3.3.1.1 The Asset Management Supervisor shall prepare the asset management ledger, execute the asset management, and make efforts to utilize assets in the most effective way for researches.

26.3.3.1.2 The manager in charge of asset management in the Budget and Accounting Section shall serve as the Asset Management Supervisor.

26.3.3.1.3 The Asset Management Supervisor may cause any other staff(s) to handle any part of his or her business.

26.3.3.1.4 In the event that the Asset Management Supervisor is unable to act, a person designated by the Vice President for Financial Management shall act on his or her behalf.

26.3.3.2 Fixed Assets Etc. Management Works
The Asset Management Supervisor shall conduct the following works concerning the management of fixed assets. (Asset management of books shall be governed by the PRP Chapter 6. University Library.）

1. Grasping the usage conditions of fixed assets etc.
2. Procedure of permission for the lending and disposition of fixed assets 
3. Arranging Asset Management Ledgers
4. Giving instructions and advice regarding the daily management of fixed assets etc.
5. Having Asset Use Supervisors specified in 26.3.3.3 inspect fixed assets each fiscal year, and summarizing the findings

26.3.3.3 Asset Use Supervisors
The Asset Management Unit is defined as the Research Unit, Section, Division or Office within the OIST School Corporation. Asset Use Supervisors shall be the Faculty member for fixed assets in each research unit, Section Leader for fixed assets in each section, and Manager or a person in an equivalent position or above for fixed assets in each Division or Office (excluding fixed assets that are supervised by Section Leaders), except for following items.

1. Asset Use Supervisor for the fixed assets etc, which are placed at shared space for common use is as follows.
   1. Funiture (Lab benches, Funiture, Shelves, etc.): The appropriate Section Leader of Buildings and Facilities Management Division
   2. Research Equipment (including refregerators for research): appropriate Section Leader of the Core Facilities
2. Asset Use Supervisor for the fixed assets etc, which are not yet occupied by specific users or were used by closed research units and until a new user is found is as follows.
   1. Funiture (Lab benches, Furniture, Shelves, etc.): The appropriate Section Leader of Buildings and Facilities Management Division
   2. Researhc Equipment (including refregerators for research) : The appropriate Section Leader of the Core Facilities
   3. IT fixed assets etc: The appropriate Section Leader of office of the IT Division
3. Assets Use Supervisors for IT fixed assets, etc. shall be primarily  Faculty member in each research unit, Section Leader in each section, and Manager or a person in an equivalent position or above in each Division or Office where the IT fixed assets were purchased or transferred. (Asset management of IT fixed assets etc, shall be governed by the PRP Chapter 17 Information Techology and Security) 

26.3.3.3.1 Asset Use Supervisors shall receive fixed assets etc. from the Asset Management Supervisor and work to have them used effectively in research activities etc.

26.3.3.3.2 Asset Use Supervisors must observe the following items in the use of fixed assets etc. in implementing their daily management.

1. Clarify their conservation and usage conditions by using the asset management list
2. Carry out minor repairs
3. Devise the necessary measures to prevent fires, theft, loss, damage and other incidents
4. Carry out inspections of fixed assets etc. and report findings
5. Ensure the appropriate use of fixed assets etc.

26.3.3.4 Obligations of Fixed Asset Users
Fixed asset users must use fixed assets etc. under the management and supervision of Asset Use Supervisors and treat them with care as good stewards.

26.3.3.5 Asset Management Ledgers
The asset management ledgers specified in 26.3.3.2 shall be as follows:

1. Fixed asset ledger
2. Loan ledger 
3. Borrow ledger

26.3.3.5.1 Fixed asset ledgers must be recorded under the categories specified in Appended table.

26.3.3.6 Acquisition and Recording in the Fixed Asset Ledger
When fixed assets etc. are acquired, the Asset Management Supervisor must record said assets etc. in the fixed asset ledger.
Provided, however, that if fixed assets are thrown in the ocean for marine observation on the basis that they are not intended to be salvaged because of its difficulty, the fixed assets are treated as consumables.

26.3.3.6.1 When movable property etc. is acquired, the Asset Management Supervisor hands over identification labels to Asset Use Supervisor after recording said property in the fixed asset ledger. Asset Use Supervisor must promptly attach identification labels to the acquired movable property etc.

26.3.3.7 Acquisition Prices
The acquisition prices of fixed assets etc. shall be as follows:

1. For purchased assets, the purchase price and incidental expenses
2. For self-constructed assets, the overall cost calculated as the sum of the proper cost prices
3. For items donated or contributed, the fair assessed price based on market value, etc.
4. For items acquired through exchanges, the book value of the assets given in exchange

26.3.3.8 Receipts of Donations and Exchanges
Receipts of donations and exchanges of fixed assets etc. must follow the prescribed procedures.

26.3.3.9 Repairs
The Asset Use Supervisor must conduct repairs that are necessary to maintain the functions of the concerned fixed assets.

26.3.3.10 Preservation of Rights
The Asset Management Supervisor must promptly register land, buildings and other fixed assets that require registrations etc. promptly after acquisition in accordance with the stipulations of the concerned laws to protect them from third parties.

26.3.3.10.1 The Asset Management Supervisor must implement the prescribed change procedures without delay whenever any changes arise to the items recorded in the registrations etc. specified in 26.3.3.10.

26.3.3.11 Insurance
The Asset Management Supervisor must consider securing property insurance and other necessary measures when deemed necessary for fixed assets subject to accidents and other damages.

26.3.3.12 Usage
Asset Use Supervisors must always know who are the users of fixed assets etc.

26.3.3.13 Transfer
When fixed assets etc. is necessary for transfer, current Asset Use Supervisor of the fixed assets etc. must consult with next Asset Use Supervisor on the transfer. The former Asset Use Supervisor must promptly apply for the transfer request to Asset Management Supervisor after the fixed assets etc. is transferred to the later Asset Use Supervisor. Asset Management Supervisor must record the fixed assets etc. in the fixed assets ledger after receiving the transfer request.

26.3.3.14 Lending
When the lending of fixed assets, etc. is deemed necessary and this does not interfere with the works of the Corporation, the Accounting Supervisor may loan the fixed assets, etc. to other parties in accordance with the following procedures.

26.3.3.14.1 The lending of important assets requires the approval of CEO/President.

26.3.3.14.2 Lending Principles
Lending should be conducted with payment (hereinafter referred to as “paid lending”). However, lending may be conducted without payment (hereinafter referred to as “gratis lending”) with the approval same as the provisions of 26.3.3.14 or 26.3.14.1 in any of the following cases

1. When necessary for dissemination of public information regarding the Corporation’s research findings or business, or otherwise necessary for the execution of the Corporation’s business
2. When lending fixed assets to national or regional public bodies, non-profit foundations, or corporations established under special acts, provided this does not interfere with the business of the Corporation
3. When lending fixed assets to universities and other research and educational organizations, provided this does not interfere with the business of the Corporation.

26.3.3.14.3 Lending Procedures
When lending fixed assets under the provisions of 26.3.3.14 or 26.3.3.14.1, the Asset Management Supervisor must clarify the following items and devise the necessary measures for the loans.

1. Reason for lending and name of borrowing institution
2. Names and numbers of fixed assets being loaned
3. Specifications of fixed assets being loaned
4. Loan periods
5. Places of use and names of borrowers of fixed assets being loaned
6. Liability during loan period
7. Other necessary items

However, these procedures may be omitted for items whose lending is clarified beforehand under sponsored research agreements.

26.3.3.15 Disposition
When the Asset Management Supervisor receives fixed assets etc. returned by Asset Use Supervisors, the Asset Management Supervisor must consider the usability of the said fixed assets, etc. for others and also examine the necessity of disposition.

26.3.3.15.1 Unnecessary important assets which the Asset Use Supervisors deem to be of no effective use (hereinafter referred to as “determined unnecessary”) may be determined as unnecessary by the approval of the CEO/President. Unnecessary fixed assets, etc. aside from important assets may be determined as unnecessary by the Accounting Supervisor.

26.3.3.15.2 The disposition of important assets must obtain an approval from the CEO/President. The disposition of fixed assets etc. aside from important assets must obtain an approval from the Accounting Supervisor.

26.3.3.15.3 Disposition Principles
The Asset Management Supervisor must sell off fixed assets that have been determined unnecessary under the provisions of 26.3.3.15.1. However, items that cannot be sold off may be disposed.

26.3.3.16 Loss, Damage and Theft
When Asset Use Supervisors discover that fixed assets etc. under their custody have been lost, damaged or stolen, they must promptly report to the Asset Management Supervisor, investigate the present conditions, and work to prevent impediments to the conduct of business, the expansion of damages, etc.

23.3.3.16.1 When the Asset Management Supervisor receives reports fixed assets etc. specified in 26.3.3.16, the Asset Management Supervisor must promptly report to the Accounting Supervisor.

26.3.3.17 Sale
The Asset Management Supervisor must devise the necessary measures for conducting sales under the provisions of 26.3.3.15.3.

26.3.3.18 Gratis Ownership Transfer
Although in principle the provisions of 26.3.3.15.3 apply in general, the Asset Management Supervisor may transfer the ownership of fixed assets (excluding any important asset specified by Cabinet Office Ordinance) determined unnecessary under the provisions of 26.3.3.15.1, to institutions, organizations or individuals without compensation (hereinafter referred to as “gratis ownership transfer”), with the permisson of the Accounting Supervisor, under any of the following circumstances. However, gratis ownership transfer requires the approval of the CEO/President if the fixed assets are important assets.

1. When necessary for dissemination of public information regarding the Corporation’s research findings or business, or otherwise necessary for the execution of the Corporation’s business
2. When transferring ownership of fixed assets to national or regional public bodies, non-profit foundations, or corporations established under special acts
3. When transferring ownership of fixed assets to relevant local bodies for the purpose of enhancing the relationships with OIST and the local community
4. When transferring ownership of fixed assets to universities and other research and educational organizations
5. When the removal costs clearly exceed the fixed assets’ value
6. When OIST students need to use the fixed assets for academic research after graduation

26.3.3.19 Removal
The Asset Management Supervisor must promptly remove fixed assets etc. under the following circumstances:

1. When they are lost from accidents, theft, etc.
2. When they have been disposed of and their ownership rights are terminated; or
3. When their use has ceased because they have become outdated or inappropriate.

26.3.3.20 Construction in Progress Account
Expenditures on facilities that are newly constructed, expanded or improved under construction contracts shall be recorded in the construction in progress account, and then transferred to the appropriate accounts without delay once they are provided for the conduct of business.

26.3.3.21 Capital Expenditures and Repair Expenses
Expenditures to improve the functions or extend the working lives of fixed assets shall be added to the price of the concerned fixed assets.

26.3.3.21.1 Expenditures to maintain and conserve fixed assets shall be handled as repair expenses.

26.3.3.22 Depreciation
Depreciation of any tangible and intangible fixed assets shall be calculated each fiscal year.

26.3.3.22.1 Depreciation Method
The initial month for the depreciation of depreciable fixed assets shall be the month in which said assets are acquired and begin to be used.

1. Depreciable assets shall be depreciated using the straight-line method.
2. The residual value of tangible fixed assets shall be 1 yen of memorandum price of the acquisition price, and the residual value of intangible fixed assets shall be zero.
3. The service life which is the basis for the depreciation shall be as specified by the Corporation Tax Law (Law No. 34 of 1965). However, the service life of depreciable assets acquired for special research purposes under sponsored research budgets etc. shall be the period until the sponsored research is completed. The service life of depreciable assets acquired through the donation of used assets etc. shall be calculated using the simplified method stipulated by the Ministerial Ordinance on the Service Life Etc. of Depreciable Assets (Ministry of Finance Ordinance No. 15 of March 31, 1965).
4. The accounting of other items not specified above shall be in accordance with laws and regulations, etc.

26.3.3.23 Valuation Losses
Extraordinary depreciation must be charged in cases when the functional value of fixed assets is conspicuously impaired because of the discovery of new technologies or other external developments that could not be foreseen when their service lives were estimated.

26.3.3.23.1 In cases when fixed assets are destroyed due to accidental events such as disasters and other incidents, the amount of the lost value must be deducted from the concerned assets’book value.

26.3.3.24 Report by Asset Management Supervisor
The Asset Management Supervisor shall, at each account settlement, report accounting information regarding fixed assets to the Accounting Supervisor.

26.3.3.25 Inspections
Asset Use Supervisors must inspect the conditions of tangible fixed assets in their custody once every fiscal year, confirm that their management conditions and ledger records are accurate, and report to the Asset Management Supervisor.

26.3.3.25.1 Regardless of the stipulations of 26.3.3.25, when the location of the assets, etc. is changed by moving of office or research laboratory or whenever deemed necessary the Asset Management Supervisor may instruct Asset Use Supervisors to implement inspections and submit reports.

26.3.3.25.2 When Asset Use Supervisors recognize any discrepancies between assets and their ledger records, they must investigate the causes of said discrepancies, report to the Asset Manager, devise countermeasures to address the cause of the discrepancies, and work to prevent recurrence.

26.3.3.26 Borrowed Assets
The Corporation must prepare management ledgers and otherwise handle borrowed assets in the same manner as fixed assets. However, this may be omitted in cases when assets are borrowed for temporary use.

26.3.3.26.1 Asset Use Managers must promptly report to the Asset Management supervisor when they borrow fixed assets etc.

26.3.3.27 Small-sum Equipment
The small-sum equipment shall mean movable property (excluding cash and securities) with an acquisition price of at least ¥100,000 and less than ¥500,000 that is expected to be used for at least one year.

26.3.3.28 High Liquidity Consumables
Among movable properties with acquisition prices of less than 100,000 JPY, those considered to have high liquidity (hereafter, “High Liquidity Consumables”) require more appropriate management and use, in order to prevent misconduct. The Vice President for Financial Management shall separately specify the items and management procedure of High Liquidity Consumables.