- Contact Property Management (via phone or email) to request approval for the proposed trade.
- Submit to Purchasing within the appropriate Business Center:
- A Departmental Requisition and vendor quote of the item to be obtained.
- A Property Disposition Request (PDR) form containing the following:
- The asset(s) to be traded.
- Note under ‘resale price’ the credit that is to be received from the vendor for the traded asset(s).
- A description of the item to be received for the traded item.
Note: If multiple assets are being traded there must be a specific amount for each asset – not a lump sum for all.
- Set up the Purchase Order in FIS Banner to reflect the full value of the new asset (including, rather than less than, the value of the trade-in credit). There should be a text notation on the Purchase Order regarding the amount of credit to be received from the vendor.
- Purchasing will provide a copy of the PO as well as the original PDR to Inventory Control to keep on file until the asset is received and payment processed.
- Process the invoice for the new asset for the full amount of the asset (including trade-in credit) even though the invoice from the vendor will probably be reduced by the value of the trade-in allowance. In order to pay the correct amount, a credit memo must be created in Banner for the amount of the trade-in allowance. Be sure to process the invoice and credit memo simultaneously (cross-referencing the document numbers in the text field of both). This allows the proper payment to the vendor.
- Set up the credit memo for the amount of the trade-in, and posted to fund 095880 Asset-Undistributed Income Clearing and Account Code B5801 Undistributed Income.
- Create the new asset record from the Origination tag created by the invoice. Then the disposition of the traded asset will be processed in the Fixed Asset module under the ‘sale of asset’ function. This function will take the ‘proceeds’ of the sale (the credit amount in the undistributed clearing account from the credit memo) and return it to the appropriate departmental fund. This process allows the proper recording of the gain or loss on the disposal of the traded-in asset. Gain or loss will only be posted to 09XXXX Service Center and 1XXXXX Auxiliary funds.
|Exception: If the traded item is not a capital asset, this process cannot be used as there is no way to return the proceeds (credit) to the unit through the ‘sale of asset’ function. In this case, the credit memo should reflect the same index as the invoice and use account code 06981 Sale or Trade-In of Assets to reduce the payment to the vendor. The new asset will be recorded on inventory at full value.