Page Comparison

Introduction

Fixed assets are:

• Physical property with an acquisition value of $5,000 or more and

• an estimated useful life

• (

• U/L) of more than one year.

• Fabricated equipment, which has an aggregate value of $5,000 or more and a

• U/L of more than one year.

• A collection of purchases which have an aggregate value of $5,000 or more which is to be used over the same period of time (more than one year) e.g. library books.

Acquisitions

Finance will identify assets which meet the threshold for capitalization through month end invoice review and record these on the Fixed Asset Register. A representative from the Finance Team will reach out to you, if needed, to gain clarification as to whether

a purchased item meets the definition of a Fixed Asset.

If an item you have acquired is identified as a Fixed Asset, Finance will update your Jira Request for Payment (RFP) to note that it is a Fixed Asset. Finance will reach out via email with additional information on how to tag your asset.

Donated assets should be disclosed to University Advancement Services. Advancement will communicate the need to add the asset to the Fixed Asset Register on an annual basis. Finance will reach out with additional information on how to tag your asset during year end procedures.

Tagging an asset

Once Finance has identified that an item meets the definition of a Fixed Asset, Finance will enter it into the Fixed Asset Register and assign it a

tag number. A physical tag will be sent via internal mail

. This tag must be attached to the asset.

In the case where multiple items comprise the Fixed Asset, the tag should be attached to the highest value individual item and a description of where the items are should be maintained locally within your department.

For library books and computer equipment managed by CIS, no tag will be assigned, as local procedures to track items are already in place.

Accounting for Fixed Assets

At the University level, capital equipment is not expensed at the time of purchase and will instead be recognized as a Fixed Asset over its U/L (capitalized). At a department level, the item will still be recognized as an expense at the time of purchase.

Depreciation will be expensed annually based on an

Asset's U/L:

Disposals

Finance must be notified before an asset is sold/disposed.

Per DOR Guidance, we must collect sales tax at the current tax rate from the buyer. The seller is required to display sales tax collected as a separate line item on the receipt. After the asset has been sold, the department should email GL (generalladger@spu.edu) with details of the disposal, including approval of disposal by department head and any receipt or proof of sale. All proceeds must be recorded using account 52803 - Proceeds From Sale Of Fixed Assets whereas sales tax should go into 111002-22401 (Sales Tax Payable). Any gain on sale is subject to taxes. Please see example below.

Miscellaneous Sales (Sale of Non-Capitalized Items)

Before the sale, the department should acquire the proper approval. For payment instructions, please see the Treasurypage for details. In accordance with the law, the receipt to the customer must display sales tax collected at the current tax rate as a separate line item (DOR Guidance). The revenue and tax should be separate on deposit transmittal as well.

For example: The department sold an old set of speakers for $250 + tax (10.35%)

Receipt to customer:

Image Added

Accounting on transmittal:

11X002 - 1234 - 52826 (Other Income) $250.00

111002 - 22405 (Other Sales Tax Payable) $25.88

Leases

Finance must be notified before entering into any lease arrangement or if the terms of a current lease arrangement are updated. Budget managers should go through the Contract Review Process before signing.

Asset Inventory Count

Fixed Asset records are verified annually to ensure that the inventory records within the asset management system are accurate.

The Finance Team will send a copy of relevant sections of the Fixed Asset Register to each department responsible for any Fixed Assets every two years. The department must physically verify all items listed on the Fixed Asset Register.

Inform Finance of any items which cannot be located.