Fixed Assets

In order for a purchase to qualify as a fixed asset, it needs to meet the threshold for cost to the University of exceeding $5,000.

Note that this does not mean a single object needs to exceed the $5,000 threshold, but a collection of purchases to be used over the same period, such as a set of library books or component parts of the same asset.

The concept of a Useful Life (commonly abbreviated as U/L) is an accounting estimate for the duration during which the asset will produce a benefit to the University. These estimates do not need to reflect a precise measure of how long we expect to use an asset, nor do they intend to forecast how long the University will have the asset. The most important benefit derived of an asset’s Useful Life is consistency for financial reporting.

The responsibility on a purchaser is to include the invoice and description of the asset on the RFP submitted to Accounts Payable so that the GL Accounting team can capitalize the assets and depreciate them appropriately according to their Useful Life.

Note that these purchases will not be expensed at the point of purchase, but over the useful lives of the assets.

Asset Tagging

An imperative control over fixed assets is physical tagging of any depreciable assets meeting the $5,000 dollar value threshold belonging to any category of property, plant & equipment. Each month, when the GL Accounting team prepares the reclass journal entry to move the expensed invoice balance to the appropriate fixed asset account, the requestor from the RFP will receive an email from General Accounting to affix a physical tag to the asset to be tracked centrally on the fixed asset schedule maintained by the GL Accounting team.

It will be the responsibility of the department requesting payment for the asset to maintain physical control of the asset and its tag.

Useful Life Schedule

Refer to the Useful Life schedule below: