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.
Refer to the Useful Life schedule below:
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 that the GL accounting team will need all lease information available. |
Machinery & Equipment | 5 - 10 | Devices, audiovisual, computers, machines, equipment exceeding the dollar threshold to be described and depreciated over an estimated Useful Life. |
Vehicles | 10 - 15 | Cars, motorized carts, or any other vehicle exceeding the dollar threshold (bought or leased) |
Library Books | 20 | Any purchase of a set of library books beyond the dollar threshold |
Furniture & Fixtures | 5 - 10 | Furnishings from seats, couches, desks, tables, whiteboards, display sets, etc. whose cumulative purchase exceeds the dollar threshold |
Artwork | Case-by-case | Decorative goods exceeding the dollar threshold |
Land | N/A | Land belongs to Fixed Assets (Property, plant and equipment) but is not depreciated. |