| Abstract: | The purpose of this paper is to assess the accounting treatment of fixed assets in international foreign charities /NGOs operating in Ethiopia. The accounting transactions for fixed assets go through from acquisition, depreciation, valuation and to disposals. The study used a descriptive research design in order to explore the accounting practice of fixed assets in international charities /NGOs. 22 (twenty-two) international foreign charities /NGOs were selected out of the total population based on judgmental (purposive) sampling technique. 22 finance directors, managers, senior accountants and finance officers were selected one from each organization. The data collection instrument was a questionnaire which adopted from literatures review, accounting standards and previous studies. Validity and reliability test was conducted to check the consistency of the instruments, scoring a Conbach’s Alpha value greater than 0.70.
The descriptive results confirmed that most international NGOs used a modified and accrual basis of accounting; followed a US GAAP accounting standard; and also expensed their fixed asset cost at acquisition. Organizations’ depreciating the fixed asset was used straight line method to allocate the fixed asset cost when it is used up. Majority of the organizations depreciate the fixed asset were used the shelf life of the asset and some of them also used grant /project life. On the current development of property, plant and equipment for asset valuation and impairment loss treatments most of the NGOs were new. However, they have proper fixed asset registration sheets which have all the necessary information.
Finally, the researcher concluded that the fixed assert accounting practice among NGOs is quite different and capitalizations of fixed assets were influenced by exchange rate for counting depreciation expense and parent organization policies |
