10 Recognition: Items of property, plant and equipment are recognized as assets if it is probable that the future economic benefits will flow to WHO, the cost or fair value of the item can be measured reliably, and WHO has full control over the asset. Initial recognition of property, plant, and equipment are measured at cost.
20 Property, plant and equipment with a value of US$20,000 or more, is recognized as non-current assets in the Statement of Financial Position and depreciated over its useful life. All assets below the value of US$20,000 are expensed.
30 Property, plant and equipment's total cost comprises (a) the asset purchase price and (b) transport, handling and or other directly attributable costs (such as the cost of site preparation, initial delivery and handling costs or installation costs) of bringing the asset to working condition for its intended use. Total cost does not include any refundable taxes or other similar refundable costs. Only those costs, which are material and can be reasonably calculated, are included in the carrying amount.
40 After recognition as an asset, an item of property, plant, and equipment is carried at its cost, less accumulated depreciation and any impairment losses (i.e. net book value).
50 In-kind property, plant and equipment: Where an asset is acquired at no cost (gifted, contributed or donated) or for a nominal cost, it is recognized as an asset of the Organization. The asset is recorded at the fair value at the date of acquisition. Fair value can be determined by a registered appraiser. The market price of a similar asset may also be used.
60 Infrastructure assets such as roads, water treatment plants, port equipment and similar assets are not movable, and in general, the control over them (together with ownership) is already with a host country. Therefore, capitalization or depreciation is not accounted for such infrastructure assets and their total cost is expensed at the time of construction or acquisition.
70 Property, plant and equipment that are purchased by WHO on behalf of a third-party, are not capitalized. Such properties are held temporarily by WHO and they are not recorded as WHO fixed assets.
80 Donations are valued according to the current fair market value for similar assets, and the valuation used is determined by the asset team in the office where the assets are utilized, and supported by robust documentation. Disposal of donated items follows the same procedures as for purchased assets - Refer to OSS.SOP.XIII.002 Fixed Asset Management.
90 Useful lives: The estimated useful lives in years are provided in the table below:
|
Asset Class
|
Years
|
|
Land
|
N/A
|
|
Buildings - Permanent
|
60-100
|
|
Buildings - Temporary
|
5-10
|
|
Furniture
|
15
|
|
Vehicles and transport
|
7
|
|
Computer & Communications equipment
| 8 |
Machinery & Specialized equipment
| 8
|
100 Depreciation: WHO uses the straight-line depreciation which is calculated by dividing the cost over the asset's estimated useful life. Depreciation is charged on an annual basis. However, when equipment is placed in service between the 1st and the 15th of the month, a full month of depreciation is recognized for that month and when equipment is placed in service from the 16th of the month, depreciation is recognised from the following month. Depreciation charges are done centrally at the consolidated level of financial reporting. No depreciation charges are reflected at the project or award accounting levels.
110 Retirements: An item of property, plant and equipment is removed from the financial statements upon disposal. A disposal can be effected through donation, sale, scrap or write-off. Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the difference between the actual net disposal proceeds and the carrying amount of the asset. The gain or loss is included in the Statement of Financial Performance as an item of revenue or expense, as appropriate.
120 An impairment loss of a non-cash generating asset is the amount by which the carrying amount of an asset exceeds its recoverable service amount. WHO reviews its assets periodically for any evidence of impairment. The carrying amount of the asset is adjusted accordingly.
