# KCG Inventory Management Plan

## Consumable Goods & Fixed Assets

---

## Introduction

This document is the complete plan for managing all warehouse inventory items in the KCG system. Every item falls into one of two categories:

| | Consumable Goods | Fixed Assets |
|--|-----------------|--------------|
| **What they are** | Materials that get used up during project work | Equipment and machinery that are used but not consumed |
| **Examples** | Cables, cement, fasteners, paint, gloves | Generators, vehicles, welding machines, cranes |
| **How they're valued** | At purchase cost (FIFO) | Purchase cost minus depreciation |
| **Key concern** | Tracing items back to their source invoice | Tracking location, condition, and declining value |
| **End of life** | Consumed/used up | Sold, scrapped, or written off |

Both categories share the same receiving process (supplier delivery), the same movement processes (material issue, site transfer, return), and the same need for full traceability. But they are managed differently once in the system.

---

# SECTION A: CONSUMABLE GOODS

---

## A1. The Problem Today

When goods arrive at the warehouse through a supplier delivery, the system records the invoice number and delivery note number against the incoming operation. However, once those items are added to the general inventory, the link back to the original delivery is lost.

This means:

- When a material request is fulfilled and items are dispatched to a project, we cannot see which specific delivery those items came from.
- When items are transferred from one project site to another, the connection to the original invoice is broken.
- When items are returned to the warehouse, there is no easy way to trace them back to their original purchase.
- Audit and reconciliation require manual effort to match items with their source invoices.

---

## A2. What We Want to Achieve

**The goal: for every consumable item in the system, we should always be able to answer "Which invoice or delivery note brought this item in?"**

### Invoice/DN Binding at Receipt

When consumable goods arrive through a supplier delivery:

- The **invoice number** and **delivery note number** are already captured in the system.
- Each item received in that delivery should carry a permanent link to this invoice/DN throughout its entire lifecycle.

### Tracking Through Material Issues

When items are issued from warehouse inventory to fulfill a material request:

- The system should record which specific inventory batch (and therefore which original invoice/DN) each item came from.
- The delivery note printed for the issue should be traceable back to the source invoice.
- If a single material issue pulls items from multiple deliveries (e.g., 50 from Invoice A and 30 from Invoice B), both sources should be recorded.

### Tracking Through Site-to-Site Transfers

When items are transferred from one project site to another:

- The transfer record should carry forward the original invoice/DN reference.
- The receiving site should inherit the source tracking — they should know not just "which site sent this" but "which original delivery this item came from."
- This tracking should survive multiple transfers (Site A → Site B → Site C should still trace back to the original invoice).

### Tracking Through Returns

When items are returned to the warehouse from a project site:

- The return should link back to the original invoice/DN.
- The returned items going back into warehouse inventory should retain their source tracking.

### Audit Trail

At any point, for any consumable item:

- A user should be able to see the full chain: **Invoice/DN → Warehouse Receipt → Issue to Project → Transfer to Another Site → Return to Warehouse**.
- Reports should be available to show all items from a specific invoice and where they currently are (in warehouse, at which project, consumed, returned, etc.).

---

## A3. How It Works — The Tracking Chain

### Step 1: Goods Arrive (Supplier Delivery)

A supplier delivers goods to the warehouse. The storekeeper records:

- Invoice Number (e.g., INV-2026-001)
- Delivery Note Number (e.g., DN-5678)
- Each item received with its quantity

**What the system does:** Each item batch in the inventory is tagged with a reference back to this delivery operation. The invoice number and delivery note number become part of the item's identity in stock.

### Step 2: Material Request & Issue

A project requests materials. The warehouse dispatches items.

**What the system does:** When items are picked from inventory, the system follows FIFO (First-In, First-Out) by expiry date. For each item dispatched, it records which inventory batch it came from — and therefore which original delivery/invoice.

Example:
- Project Alpha requests 100 units of Item X
- 60 units come from Batch A (Invoice INV-2026-001)
- 40 units come from Batch B (Invoice INV-2026-015)
- Both sources are recorded in the fulfillment record

### Step 3: Site-to-Site Transfer

Project Alpha transfers 30 units of Item X to Project Beta.

**What the system does:** The transfer allocation system records which batch those 30 units originally belonged to. If the 30 units came from Batch A (Invoice INV-2026-001), that link is preserved. Project Beta's inventory now shows 30 units traceable to Invoice INV-2026-001.

### Step 4: Return to Warehouse

Project Beta returns 10 unused units of Item X back to the warehouse.

**What the system does:** The return is linked back through the chain — the system knows these 10 units were originally from Invoice INV-2026-001, went to Project Alpha, then to Project Beta, and are now back in warehouse stock with the same source reference.

---

## A4. What Stays the Same

- The way goods are received through supplier delivery does not change.
- The way material requests are created and approved does not change.
- The way site-to-site transfers are initiated does not change.
- The way returns are processed does not change.

All changes happen **behind the scenes** — the system automatically tracks and carries forward the invoice/DN reference through each step.

---

## A5. What Changes for Users

### On Inventory Screens

- Items in stock will show their **source invoice/DN number** alongside the existing batch and quantity information.
- Users can filter or search inventory by invoice number to see all items from a specific delivery.

### On Material Issue / Delivery Notes

- Printed delivery notes will include the **source invoice/DN reference** for each item line, showing which original delivery the items came from.
- If items come from multiple invoices, each source is listed.

### On Site Transfer Documents

- Transfer records will show the **source invoice/DN** for each item being transferred.
- The receiving site can see the complete chain of custody.

### On Return Documents

- Returns will reference the **original invoice/DN**, making it clear which delivery the returned items belong to.

### Consumable Goods Reports

- **Invoice Tracking Report**: Select an invoice number and see where every item from that invoice currently is (in warehouse, at which project, consumed, transferred, returned).
- **Item Provenance Report**: Select an item at any location and trace its full history back to the original invoice.

---

# SECTION B: FIXED ASSETS

---

## B1. What is a Fixed Asset?

A fixed asset is any item that:

- Has a useful life of **more than one year**
- Has a value **above the capitalisation threshold** (e.g., above AED 1,000)
- Is **not consumed** during use — it wears out gradually
- **Loses value** over time (depreciation)

**Examples in construction context:**

| Fixed Assets | NOT Fixed Assets (Consumables) |
|-------------|-------------------------------|
| Generators | Cables and wiring |
| Welding machines | Fasteners and bolts |
| Scaffolding systems | Cement and adhesives |
| Power tools (drills, saws) | Paint and coatings |
| Vehicles and trucks | Cleaning supplies |
| Survey equipment | Safety gloves and masks |
| Concrete mixers | Sandpaper and abrasives |
| Compressors | Lubricants and oils |
| Cranes and hoists | Tapes and sealants |

---

## B2. Asset Enrollment

### What Happens When a Fixed Asset Arrives

When a fixed asset is received — whether through a supplier delivery, direct delivery to a project site, or any other means — it goes through an **enrollment process** that captures all the information needed to track it for its entire life.

### Information Captured at Enrollment

**Identity:**

- **Asset Number**: A unique identifier assigned to every fixed asset (e.g., FA-2026-0001). This is the asset's permanent ID, like a national ID number for the asset.
- **Serial Number**: The manufacturer's serial number (already tracked in the current system).
- **Description**: What the asset is.
- **Category/Class**: The type of asset (Machinery, Vehicles, Tools, Electrical Equipment, etc.). This determines how the asset depreciates.

**Purchase Information:**

- **Acquisition Date**: When the asset was purchased or received.
- **Supplier**: Who supplied the asset.
- **Invoice/DN Number**: The purchase invoice reference.
- **Purchase Cost**: The original cost of the asset (including delivery, installation, and any costs to make it ready for use).
- **LPO Reference**: The purchase order that authorised the buy.

**Depreciation Setup:**

- **Useful Life**: How many years the asset is expected to remain useful (e.g., a generator might have a 10-year useful life).
- **Depreciation Method**: How the value loss is calculated (explained in detail below).
- **Salvage Value**: The estimated value at the end of its useful life — what we could sell it for as scrap or second-hand (e.g., a AED 50,000 generator might have a AED 5,000 salvage value).
- **Depreciation Start Date**: When depreciation begins (usually the date it's put into service, not necessarily the purchase date).

**Location & Assignment:**

- **Current Location**: Where the asset is physically located (warehouse, project site, etc.).
- **Assigned Project**: Which project the asset is currently serving.
- **Division**: Which company division owns/manages the asset.
- **Custodian**: The person responsible for the asset.

**Warranty & Maintenance:**

- **Warranty Period**: How long the manufacturer's warranty lasts (already tracked in the current system).
- **Warranty Expiry Date**: When the warranty ends.
- **Maintenance Required**: Whether the asset needs regular servicing.
- **Maintenance Interval**: How often servicing is needed (e.g., every 90 days).

---

## B3. Asset Tracking

### Where is Every Asset?

The system will track the physical location and assignment of every fixed asset at all times. An asset can be in one of these places:

| Location | Meaning |
|----------|---------|
| **Warehouse** | Stored in the main warehouse, available for deployment |
| **Project Site** | Deployed and in use at a specific project |
| **In Transit** | Being transferred between locations |
| **Under Maintenance** | Sent for repair or servicing |
| **Retired/Disposed** | No longer in active use |

### Asset Movements

Every time an asset moves, the system records:

- **From** where (warehouse, which project, which division)
- **To** where (which project, which warehouse, maintenance)
- **Date** of the movement
- **Reason** for the movement
- **Authorised by** whom
- **Condition** at the time of movement (good, fair, needs repair)

### Movement Types

**1. Deployment (Warehouse → Project Site)**

An asset is sent from the warehouse to a project site for use. This is done through the existing material request and issue process.

**2. Site-to-Site Transfer (Project A → Project B)**

An asset is moved from one project to another. The system tracks:
- The full chain of custody (which projects the asset has served)
- Condition at each transfer point
- Who authorised the transfer

**3. Return to Warehouse (Project Site → Warehouse)**

An asset comes back to the warehouse after project completion or when no longer needed at that site.

**4. Maintenance Transfer (Any Location → Service Centre)**

An asset is sent for repair or servicing. The system tracks:
- Reason for maintenance (scheduled, breakdown, damage)
- Expected return date
- Maintenance cost (added to the asset's total cost of ownership)

**5. Disposal (Any Location → Out of System)**

An asset is permanently removed from the system (sold, scrapped, donated, or written off).

### Asset Status at Any Point in Time

For every fixed asset, the system can answer:

- Where is it right now?
- What condition is it in?
- What is its current book value (after depreciation)?
- When was it last serviced?
- When is the next maintenance due?
- Is it under warranty?
- Which projects has it served?
- How many times has it been transferred?
- What is its total cost of ownership (purchase + maintenance + repairs)?

---

## B4. Depreciation

### What is Depreciation?

Depreciation is the systematic reduction of an asset's recorded value over its useful life. It reflects the reality that assets lose value as they age and wear out.

**Example:**
- A generator is purchased for AED 50,000
- It has a useful life of 10 years
- Its salvage value (scrap value) is AED 5,000
- The depreciable amount is AED 45,000 (50,000 - 5,000)
- Each year, a portion of that AED 45,000 is recorded as depreciation expense

### Depreciation Methods

Different types of assets wear out differently. The system will support multiple depreciation methods, and each asset category can use a different method.

---

#### Method 1: Straight-Line Depreciation

**How it works:** The same amount of depreciation is recorded every year throughout the asset's useful life.

**Best for:** Assets that provide roughly equal benefit each year — office furniture, buildings, containers, scaffolding.

**Formula:**

    Annual Depreciation = (Purchase Cost - Salvage Value) / Useful Life in Years

**Example — Scaffolding System:**

| Detail | Value |
|--------|-------|
| Purchase Cost | AED 30,000 |
| Salvage Value | AED 3,000 |
| Useful Life | 9 years |
| Annual Depreciation | AED 3,000 per year |

| Year | Opening Value | Depreciation | Closing Value |
|------|--------------|--------------|---------------|
| 1 | 30,000 | 3,000 | 27,000 |
| 2 | 27,000 | 3,000 | 24,000 |
| 3 | 24,000 | 3,000 | 21,000 |
| ... | ... | 3,000 | ... |
| 9 | 6,000 | 3,000 | 3,000 (salvage) |

---

#### Method 2: Declining Balance Depreciation

**How it works:** A fixed percentage is applied to the asset's **remaining book value** each year. Depreciation is higher in early years and decreases over time.

**Best for:** Assets that lose value quickly in the first few years — vehicles, computers, electronic equipment, technology-heavy items.

**Formula:**

    Annual Depreciation = Book Value at Start of Year × Depreciation Rate

The depreciation rate is typically calculated as:

    Rate = 1 - (Salvage Value / Purchase Cost) ^ (1 / Useful Life)

**Example — Company Vehicle:**

| Detail | Value |
|--------|-------|
| Purchase Cost | AED 120,000 |
| Salvage Value | AED 20,000 |
| Useful Life | 5 years |
| Depreciation Rate | ~30% per year |

| Year | Opening Value | Depreciation (30%) | Closing Value |
|------|--------------|-------------------|---------------|
| 1 | 120,000 | 36,000 | 84,000 |
| 2 | 84,000 | 25,200 | 58,800 |
| 3 | 58,800 | 17,640 | 41,160 |
| 4 | 41,160 | 12,348 | 28,812 |
| 5 | 28,812 | 8,812 | 20,000 (salvage) |

Notice how depreciation is highest in Year 1 (AED 36,000) and lowest in Year 5 (AED 8,812). This matches the reality — a new vehicle loses the most value in its first year.

---

#### Method 3: Double Declining Balance Depreciation

**How it works:** Similar to declining balance, but uses **double** the straight-line rate. This results in even faster depreciation in the early years.

**Best for:** Assets that become obsolete quickly — computers, specialised technology, electronic testing equipment.

**Formula:**

    Depreciation Rate = (2 / Useful Life) × 100%
    Annual Depreciation = Book Value at Start of Year × Depreciation Rate

**Example — Survey Equipment:**

| Detail | Value |
|--------|-------|
| Purchase Cost | AED 40,000 |
| Salvage Value | AED 4,000 |
| Useful Life | 5 years |
| Depreciation Rate | 40% (double of 20% straight-line rate) |

| Year | Opening Value | Depreciation (40%) | Closing Value |
|------|--------------|-------------------|---------------|
| 1 | 40,000 | 16,000 | 24,000 |
| 2 | 24,000 | 9,600 | 14,400 |
| 3 | 14,400 | 5,760 | 8,640 |
| 4 | 8,640 | 3,456 | 5,184 |
| 5 | 5,184 | 1,184 | 4,000 (salvage) |

Note: In the final year, depreciation is limited so the book value doesn't drop below salvage value.

---

#### Method 4: Units of Production Depreciation

**How it works:** Depreciation is based on **actual usage** rather than time. The more the asset is used, the more it depreciates.

**Best for:** Assets whose wear depends directly on how much they're used — generators (based on running hours), vehicles (based on kilometres), concrete mixers (based on batches produced).

**Formula:**

    Depreciation per Unit = (Purchase Cost - Salvage Value) / Total Expected Units
    Annual Depreciation = Units Used This Year × Depreciation per Unit

**Example — Generator (based on running hours):**

| Detail | Value |
|--------|-------|
| Purchase Cost | AED 80,000 |
| Salvage Value | AED 8,000 |
| Expected Total Hours | 36,000 hours |
| Depreciation per Hour | AED 2.00 |

| Year | Hours Used | Depreciation | Closing Value |
|------|-----------|--------------|---------------|
| 1 | 4,500 hrs | 9,000 | 71,000 |
| 2 | 5,200 hrs | 10,400 | 60,600 |
| 3 | 3,800 hrs | 7,600 | 53,000 |
| 4 | 6,000 hrs | 12,000 | 41,000 |
| 5 | 4,000 hrs | 8,000 | 33,000 |

Notice how depreciation varies each year based on actual usage. In Year 4, the generator was used heavily (6,000 hours) so depreciation was highest.

---

#### Method 5: Sum-of-the-Years'-Digits Depreciation

**How it works:** Depreciation is front-loaded using a fraction based on the remaining useful life. Higher depreciation in early years, smoothly decreasing each year.

**Best for:** Assets that provide more value in early years — heavy machinery, specialised construction equipment that becomes less efficient with age.

**Formula:**

    Sum of Years = n(n+1)/2 (where n = useful life)
    Year's Fraction = Remaining Useful Life / Sum of Years
    Annual Depreciation = (Purchase Cost - Salvage Value) × Year's Fraction

**Example — Concrete Mixer (5-year life):**

| Detail | Value |
|--------|-------|
| Purchase Cost | AED 60,000 |
| Salvage Value | AED 5,000 |
| Useful Life | 5 years |
| Sum of Years' Digits | 1+2+3+4+5 = 15 |
| Depreciable Amount | AED 55,000 |

| Year | Remaining Life | Fraction | Depreciation | Closing Value |
|------|---------------|----------|--------------|---------------|
| 1 | 5 | 5/15 | 18,333 | 41,667 |
| 2 | 4 | 4/15 | 14,667 | 27,000 |
| 3 | 3 | 3/15 | 11,000 | 16,000 |
| 4 | 2 | 2/15 | 7,333 | 8,667 |
| 5 | 1 | 1/15 | 3,667 | 5,000 (salvage) |

---

### Which Method to Use for What?

| Asset Type | Recommended Method | Reason |
|-----------|-------------------|--------|
| Office furniture, containers | Straight-Line | Steady, predictable wear |
| Vehicles, trucks | Declining Balance | Rapid early value loss |
| Computers, electronics | Double Declining Balance | Quick obsolescence |
| Generators, compressors | Units of Production | Value tied to usage |
| Heavy machinery, cranes | Sum-of-Years'-Digits | More productive when newer |
| Scaffolding, formwork | Straight-Line | Even usage pattern |
| Power tools | Declining Balance | Fast initial wear |
| Survey/testing equipment | Double Declining Balance | Technology obsolescence |

### Default Depreciation Settings by Category

The system will come with recommended defaults for common construction asset categories. These can be overridden for individual assets when needed.

| Category | Default Method | Default Useful Life | Default Salvage % |
|----------|---------------|--------------------|--------------------|
| Heavy Machinery | Sum-of-Years'-Digits | 10 years | 10% |
| Vehicles | Declining Balance | 5 years | 15% |
| Power Tools | Declining Balance | 3 years | 5% |
| Electronic Equipment | Double Declining Balance | 4 years | 5% |
| Generators | Units of Production | 36,000 hours | 10% |
| Office Equipment | Straight-Line | 7 years | 5% |
| Scaffolding & Formwork | Straight-Line | 8 years | 10% |
| Safety Equipment | Straight-Line | 3 years | 0% |

---

## B5. Asset Lifecycle

Every fixed asset goes through a lifecycle from the moment it is purchased to the moment it leaves the organisation.

### Stage 1: Acquisition

The asset is purchased and enters the system.

- Purchase order is raised and approved
- Asset is received at warehouse or project site
- Asset is inspected for quality and completeness
- **Asset Number is assigned**
- All enrollment information is captured
- Asset is added to the **Asset Register**
- Depreciation clock starts (from the date the asset is put into service)

### Stage 2: Active Use

The asset is deployed and being used.

- Assigned to projects as needed
- Transferred between sites as work demands
- Regular maintenance performed per schedule
- Condition assessed at each movement
- Depreciation calculated automatically (monthly or as configured)
- Book value updated continuously
- Warranty tracked and flagged when approaching expiry

### Stage 3: Maintenance & Repair

The asset undergoes servicing.

- **Scheduled Maintenance**: Routine servicing based on time interval or usage milestones
- **Breakdown Repair**: Unplanned repairs when something fails
- **Condition Assessment**: After each maintenance event, the asset's condition is reassessed

Maintenance costs are tracked as part of the asset's **total cost of ownership** but are **not added** to the asset's book value (they are expensed, not capitalised).

### Stage 4: Impairment (if applicable)

Sometimes an asset's value drops suddenly — not through normal wear, but due to damage, market changes, or obsolescence.

- The asset's book value is compared to its recoverable value
- If book value exceeds recoverable value, an **impairment loss** is recorded
- The book value is written down to the recoverable amount
- Future depreciation is recalculated based on the new lower value

**Example:** A specialised machine purchased for AED 100,000 with a book value of AED 60,000 is damaged. After repair, its recoverable value is estimated at AED 40,000. An impairment loss of AED 20,000 is recorded, and the book value becomes AED 40,000.

### Stage 5: Disposal

The asset is permanently removed from service.

**Disposal Methods:**

| Method | Description |
|--------|-------------|
| **Sale** | Asset is sold to a third party. Sale proceeds are compared to book value to determine gain or loss. |
| **Scrap** | Asset is scrapped. Scrap value (if any) is compared to book value. |
| **Trade-In** | Asset is exchanged for a new asset. The trade-in value offsets the cost of the new asset. |
| **Donation** | Asset is given away. Book value is written off as a loss. |
| **Write-Off** | Asset is deemed worthless (destroyed, lost, stolen). Full book value is written off. |
| **Return to Supplier** | Defective asset returned under warranty or agreement. |

**What the system records at disposal:**

- Disposal date
- Disposal method
- Sale/scrap proceeds (if any)
- Gain or loss on disposal (proceeds minus book value)
- Reason for disposal
- Authorised by whom
- Asset is marked as "Disposed" in the Asset Register

---

## B6. The Asset Register

The **Asset Register** is the master list of all fixed assets owned by the organisation. It is the single source of truth for asset information.

### What the Asset Register Shows

For each asset:

| Field | Description |
|-------|-------------|
| Asset Number | Unique identifier (FA-2026-0001) |
| Description | What the asset is |
| Category | Machinery, Vehicle, Tool, etc. |
| Serial Number | Manufacturer's serial number |
| Purchase Date | When it was bought |
| Purchase Cost | Original cost |
| Supplier | Who supplied it |
| Invoice Reference | Purchase invoice number |
| Depreciation Method | How it's being depreciated |
| Useful Life | Expected life span |
| Salvage Value | Estimated end-of-life value |
| Accumulated Depreciation | Total depreciation to date |
| Current Book Value | Purchase cost minus accumulated depreciation |
| Current Location | Where the asset is right now |
| Assigned Project | Which project it's serving |
| Condition | Good / Fair / Poor / Under Repair |
| Custodian | Person responsible |
| Warranty Status | Active / Expired |
| Next Maintenance Due | Upcoming service date |
| Status | Active / Under Maintenance / Retired / Disposed |

### Asset Register Views

Users will be able to view the register in different ways:

- **By Location**: All assets at a specific project site or warehouse
- **By Category**: All vehicles, all generators, all power tools, etc.
- **By Status**: All active assets, all assets under maintenance, all disposed assets
- **By Division**: All assets belonging to a specific division
- **By Age**: Assets grouped by how old they are
- **By Value**: Assets sorted by current book value (highest to lowest)

---

## B7. How Depreciation Runs

### Automatic Monthly Depreciation

The system will calculate depreciation automatically at the end of each month (or on demand). Here's how it works:

1. **Monthly Job**: At month-end, the system identifies all active fixed assets that need depreciation.
2. **Calculate**: For each asset, it applies the configured depreciation method to calculate that month's depreciation amount.
3. **Record**: A depreciation entry is created showing the amount, the period, and the resulting book value.
4. **Update**: The asset's accumulated depreciation and current book value are updated.

### Manual Override

Sometimes depreciation needs to be adjusted:

- An asset's useful life might be revised (extended or shortened)
- Salvage value might be re-estimated
- An impairment event might require a one-time write-down
- A correction might be needed for a previous period

All manual adjustments are logged with the reason and who made them.

### Year-End Processing

At the end of the financial year:

- A full depreciation schedule is generated for all assets
- Book values are finalised
- Fully depreciated assets are flagged for review (should they be disposed of or continue in use?)
- The asset register is locked for that year (no changes to historical periods)

---

## Glossary

| Term | Meaning |
|------|---------|
| **Acquisition Cost** | The total cost to buy and prepare an asset for use (purchase price + delivery + installation) |
| **Accumulated Depreciation** | The total depreciation recorded against an asset since it was acquired |
| **Allocation** | The link between a dispatched/transferred item and its original source |
| **Batch** | A group of the same item received in a single delivery |
| **Book Value** | The asset's value on the books (Acquisition Cost minus Accumulated Depreciation) |
| **Capitalisation Threshold** | The minimum cost for an item to be classified as a fixed asset (items below this are expensed immediately) |
| **Custodian** | The person responsible for the care and safekeeping of an asset |
| **Delivery Note (DN)** | The supplier's delivery note number accompanying the goods |
| **Depreciation** | The systematic allocation of an asset's cost over its useful life |
| **Disposal** | Permanently removing an asset from the organisation (sale, scrap, write-off) |
| **FIFO** | First-In, First-Out — older stock is dispatched first |
| **Fulfillment** | The act of dispatching items to satisfy a material request |
| **Gain on Disposal** | When sale proceeds exceed the book value at disposal |
| **Impairment** | A sudden, unexpected loss in an asset's value |
| **Incoming Operation** | The warehouse's internal record of receiving goods |
| **Invoice Number** | The supplier's invoice reference for a delivery |
| **Loss on Disposal** | When the book value at disposal exceeds sale proceeds |
| **Material Request (MR)** | A project's formal request for materials from the warehouse |
| **Salvage Value** | The estimated value of an asset at the end of its useful life |
| **Site Transfer** | Moving items from one project site to another |
| **Useful Life** | The estimated period over which an asset will be productive |
| **Write-Off** | Removing an asset's remaining book value from the records (usually when lost, stolen, or destroyed) |

---

## Summary

This plan covers two distinct but related areas of inventory management:

**Section A — Consumable Goods** ensures every consumable item maintains a clear, unbroken link to its original invoice or delivery note through every transaction. This provides full traceability, invoice-level reconciliation, chain of custody, accountability, and loss prevention.

**Section B — Fixed Assets** covers the complete lifecycle from enrollment to disposal, with five depreciation methods (straight-line, declining balance, double declining balance, units of production, and sum-of-years'-digits), asset tracking across locations, maintenance scheduling, and comprehensive reporting.

Both sections build on the existing system's strengths — serial number tracking, warranty management, location tracking, damage reporting, and movement recording — while adding the specific capabilities each item category requires.

---

*Document prepared: April 2026*
*Status: Planning*