Fixed Asset Policy

Policy Statement & Purpose

This policy provides information on how SPU recognizes Fixed Assets.

Entities Affected by this Policy

All University Faculty and Staff who have budgetary and/or purchasing responsibility.

Overview

Fixed assets are:

• Physical property with an acquisition value of $5,000 or more and a useful life (UL) of more than one year.

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

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 UEL (capitalized). At a department level, the item will still be recognized as an expense at the time of purchase.

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.

Acquisitions

Finance will identify assets which meet the threshold for capitalization through its month end invoice review and record these on the Fixed Asset Register.

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.

All Fixed Assets must be tagged.

Depreciation

Fixed assets are depreciated (expensed) based on the UEL below:

Depreciation is recorded annually.

Disposals

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

Leases

There are two types of lease classifications for a lessee: finance and operating. There are three types of leases for a lessor: direct financing, sales-type, and operating leases. The proper lease classification is important because it determines the University’s accounting and reporting requirements. Finance must be notified before entering into any lease arrangement or if the terms of a current lease arrangement are updated.

Asset Inventory Count

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

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