Related policies and additional references:
This policy pertains to the capitalization, depreciation and disposal of the University’s fixed assets. It also describes the responsibilities that Budget Directors have regarding the fixed assets assigned to their Department. Fixed assets are comprised of buildings, improvements, furniture and equipment that are acquired, built or donated, and have a value of $5,000 or greater.
The University also tracks all computer purchases. Computers are not recorded in Banner as fixed assets and therefore are not capitalized. However, they are tracked and managed by Information Services. The Procurement of Goods and Services Policy describes the process for buying computers.
Additions and Acquisitions
Most fixed assets are obtained through the purchasing process, and should follow the guidelines set forth in the Procurement of Goods and Services. A purchase order must be obtained, and once approved, is submitted to the vendor. After the product has arrived, and the invoice has been paid, the department will be contacted to obtain necessary information about the asset, including location and serial number. An asset tag will then be placed on the item, and will be added to the University’s asset records in Banner.
If an asset is donated, a Fixed Asset Status Change Form should be completed. An action code of “A” should be entered, along with a description and location, and the department that manages the asset. The value of the asset will be the appraised value at the time of the donation. Advancement Services will need to be contacted if any donated items are received. An asset tag will then be placed on the item, and will be added to the University’s asset records in Banner.
Deletions, Disposals and Sales
When assets are junked, lost or stolen, they should be reported to the Finance Office using the Fixed Asset Status Change Form. The action code of “D” should be entered. If the asset tag number is known, it should be entered on the form; otherwise a description of the asset should be provided. An explanation of the disposal should be provided, and the form should be signed by the Budget Director for that area. Vice President’s signature is also required.
If furniture or equipment requires disposal, Housekeeping should be contacted to have the item removed. Housekeeping will store the discarded items until they can be transferred to another department if possible. If the furniture or equipment is deemed to be unusable, Housekeeping will dispose of it. They will request a copy of the completed Fixed Asset Status Change Form before removing the items.
If computer equipment requires disposal, Information Services should be contacted. A technician will assess the equipment and will determine if the equipment can be reassigned to another department or is obsolete. If it is considered obsolete, they will contact Housekeeping to properly dispose of the equipment. They will request a copy of the completed Fixed Asset Status Change Form.
If an asset is replaced, such as in a trade-in, the disposal should be reported on the Fixed Asset Status Change Form. However, assets should not be sold without consulting the Finance Office. It should be noted that although an asset may have been purchased with a particular department’s budget, and assigned to that department, the department is not free to dispose or sell the asset without consulting with the Finance Office.
If furniture or equipment is lost or stolen, it should be reported to the University Police, as well as the Office of the Vice President for Administration and Finance so that any insurance claims can be filed.
Disposition of Equipment Purchased with Federal Funds
Prior to disposing of assets purchased with federal funds, the Finance Office must be notified. They will need to determine who retains title to the equipment. In general, equipment purchased with federal funds becomes the property of the University when it is delivered. There are, however, some sponsored agreements under which the sponsor retains title to any equipment purchased with sponsored funds. If title is retained by the sponsor, the agency must be notified if you want to dispose, transfer or sell the equipment. Once the federal agency is notified, approval must be granted in order for an action to take place. The money received from a sale must be returned to the agency.
Change of Location
If the location of furniture or equipment changes, the new location should be reported on the Fixed Asset Status Change Form. An action code of “C”, the description of the asset, the asset tag number and the new location (building and room number) should be entered on the form, and the form signed by the Budget Director of that area.
The main objective of the fixed asset inventory is to maintain an accurate accounting of University owned assets. Therefore, approximately once every two years, each department’s fixed assets will be inventoried. A list of assets assigned to each department will be provided, and Budget Directors are responsible for identifying the items on the list and making necessary changes to the list if needed. For items that have been disposed, the Fixed Asset Change Form must be completed. The inventory list should then be signed by the Budget Director for that department and returned to the Finance Office.
The University’s depreciation policy is to begin straight-line depreciation in the month of purchase using the following useful lives:
- Buildings – 45 years
- Parking lots, walks and drives – 20 years
- Equipment – 25 years
- Library books – 5 years