Fixed assets are:
Physical property with an acquisition value of $5,000 or more and a useful life expectancy (UEL) of more than one year.
Fabricated equipment, which has an aggregate value of $5,000 or more and a UEL 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 an asset 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 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
Each month, when a the requestor from the RFP will receive an email from General Ledger 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.
The General Ledger Team is responsible for maintaining the Fixed Asset Register. Each department is responsible for safeguarding, maintaining and utilizing all equipment it acquires.
Accounting for Fixed Assets.
Fixed Assets are not expensed at the time of purchase. Depreciation will be expensed annually based on an Assets' UEL:
Asset Category | Useful Life (years) | Description |
|---|---|---|
Buildings | 30 | Physical structure owned by the University |
Building Improvements | 30 | Permanent improvements made to buildings owned by the University |
Right-of-Use Lease Asset / Liability | Lease Term | Ensure any lease signed (including, but not limited to buildings, equipment, machinery, etc.) is sent to generalledger@spu.edu. Recent accounting pronouncements impose additional reporting requirements. The GL Team will need all lease information available. |
Machinery & Equipment | 10 | Devices, audiovisual, computers, machines, equipment meeting the definition of a Fixed Asset. |
Vehicles | 10 | Cars, motorized carts, or any other vehicle meeting the definition of a Fixed Asset (bought or leased). |
Library Books | 20 | Any purchase of a set of library books meeting the definition of a Fixed Asset. |
Furniture & Fixtures | 10 | Furnishings such as seats, couches, desks, tables, whiteboards, display sets, etc. whose cumulative purchase meeting the definition of a Fixed Asset. |
Musical Instruments | 10 | Any musical instruments bought and owned by the University meeting the definition of a Fixed Asset. |
Artwork | Not depreciated | Pursuant to ASC 958-360-35-3, artwork need not be capitalized, and an election is available to treat as artwork fixed assets similar to land. |
Land | Not depreciated. | Land as recorded as a Fixed Asset but is not depreciated. |
Depreciation is recorded annually.
Disposals
Finance must be notified before an asset is sold/disposed.
Asset Inventory Count
Fixed Asset records are verified at least once every two years to ensure that the inventory records within the asset management system are accurate.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:
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.