Leased and consigned equipment: keeping it apart from owned assets

A count team finds a machine with a clean asset tag, writes it down and moves on. A week later finance asks why it is on the asset list: it belongs to a leasing company. Or the opposite happens: a supplier's test fixture that has stood in the plant for two years is on no list at all, and is thrown away in a clean-up. Equipment on your floor that you do not own needs the same discipline as your own assets, but it must be kept apart from them.

Why mixing causes trouble

• The totals in the asset register start to mean something different, and the count result is distorted.
• At the end of the contract the owner wants every item back in a recorded condition. Without a list you cannot say which items are where.
• Damage or loss is settled under the contract, so you need to be able to show the condition at receipt.
• When an owner swaps a unit for a newer model, the old label tends to stay on the new one.
• Unlabelled equipment standing about is easily mistaken for scrap or idle machinery.

How such equipment is treated in your accounts, and what the contract requires, are questions for your accountant and your lawyer. This article only covers how to identify and track the physical items.

A separate list and a different label

• Make the label different. Use another colour and the wording "Not company property, owner: ...". Use a separate numbering series with a prefix, such as L-001 or C-001, so that the numbers cannot be confused with those of owned assets.
• The separate list holds these fields: label number, description, model and serial number, owner (lessor, supplier or customer), contract reference, start and end dates, condition at receipt, location, custodian, maintenance responsibility under the contract and the owner's contact.
• Do not merge it into the register of owned assets. Link the two only by a reference.

One caution: check the contract to see whether labels may be applied. If they may not, or if the owner's own plate has to stay visible, label the base or stand, or record the item by photo and location.

Recording the condition at hand-over

When you receive an item, photograph every side and the serial plate together with the owner's representative. Write down existing damage and any meter readings, such as running hours, and have both sides sign. Do the same on return. Keep the photos with the list.

What to check at every count

• Scan third-party items on the same walk and compare them with the separate list. Sort the results into found, not found and not on the list.
• Once a year, or at contract milestones, ask the owners for their own list of what they have placed with you, and compare. Differences are normal at first and are treated like any other variance.
• Items taken away by the owner for service or replacement are marked "off site" with the expected return date.
• An item that is on neither list is not tagged as owned. Ask first.

Return and end of contract

Obtain a return slip signed by the owner's representative, update the list, and remove the label you applied, but never the owner's own plate. Photograph the condition at departure. Do not delete returned items from the list; keep them with the date and the status "returned".

For illustration, take a plant with 480 owned assets and 35 third-party items. The 35 are 22 leased items, 9 supplier-owned test fixtures and 4 customer-owned tools. A count verifies 33, cannot find 1, and meets 1 fixture that is on neither list.

Summary

Standing on your floor does not make an item your asset. A different label colour, a separate list of owner and terms, and a check on the same walk at every count keep the register of your own assets clean. When Smart Inventory tags equipment with barcode or RFID labels, it can use separate labels for each ownership group, and it reports third-party items apart from your register, next to the missing and unrecorded assets it finds.