FIXED ASSETS. Natasha Jackson Controller s Office Tuskegee University

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1 FIXED ASSETS Natasha Jackson Controller s Office Tuskegee University

2 What Are Fixed Assets? Assets that are not consumed or sold during the normal course of the University s business. Fixed Assets include land, buildings, equipment, machinery, vehicles, building/land improvements, and other such items.

3 Fixed Assets Capitalization Policy Equipment purchased by the university that: has a unit cost of $1,500 or more the University holds title to the equipment has a unit life greater than one year is a stand alone unit or is an integral component of a larger unit or system

4 Exceptions Assets purchased by a Federal or Sponsored Program; that are the property of the respective rewarding agency. The University is the custodian of the equipment and the user department is responsible for proper control and accountability for the asset. Bulk purchases where individual items are less than $1,500 are capitalized. Like items where total purchase is $25,000 or more.

5 How are Capital Purchases Coded? Basic Budget Grants and Contracts Equipment Equipment Furniture and Office Equip Furniture and Office Equip Educational Equip Educational Equip Scientific Equip Scientific Equip Computer Equip Computer Equip Machinery Equip Machinery Equip Fixtures Fixtures Vehicles Vehicles Network Costs Network Costs Livestock Livestock Renov and Alteration Renov and Alteration Non Capital Equip Non Capital Equip Construction in Progress Construction in Progress Account String: XX-XXXXXXXX Fund- Function/Dept/- Proj Code Expense Account

6 Departmental Responsibility Code assets to the appropriate Grants & Contracts or Basic Budget object code. Each university department is responsible for the use and security of all property or equipment in it s custody. Notify Accounting and appropriate authority of the disposition or transfer of fixed assets and completion of the appropriate form. Maintain documentation for non-capitalized assets where controls deem that it is necessary to do so. ***Accounting is responsible for tagging capitalized assets and updating accounting records***

7 Equipment Disposals/Transfers A list of equipment to be disposed of or transferred should be provided to the Accounting Department: Asset Number Asset Location (Current or New) New Custodian (Transfers) Method of Disposal (Sale, Scrapping, Donation, etc.) Accounting will coordinate removal of the equipment with Sodexho.

8 Fixed Assets Reporting Accounting maintains the following asset information: Asset Description Asset Purchase Date Voucher Number Custodian GL Expense Account Vendor Name Department PO Number Estimate Life Location Room Number

9 Why Is This Information Important? F&A Cost Pools and Rate Calculation; asset detail helps us determine indirect cost rate for facilities in compliance with Federal regulations, e.g. OMB Circular A-122, closeout purposes, and for audit documentation. Internal Accountability; net land, building and equipment account for 55% of the University s assets. Improper accountability poses a huge financial risk to the university.

10 Construction In Progress Construction In progress, ongoing construction of buildings and other structures, infrastructure, additions, and land improvements. Projects that are substantially incomplete but which are anticipated to be capitalized upon completion. Building improvements, capital expenditures that materially extend the useful life of a building or increase the value of the building, or both Examples of building improvements include additions, energy conservation projects, installation of fixed equipment such as elevators, switches, sprinklers or fume hoods in a building that previously did not contain that equipment, and major renovation of space to change or improve functionality.

11 Non-Capital Purchases Assets purchased that are less than $1,500 Expenditures that do not extend the unit s original estimated useful life or significantly enhance its net value Services and parts that keep assets in working condition: Painting Carpeting New parts Plumbing repairs Service Contracts Services and parts are charged as a repair or maintenance expense and are not considered fixed assets.

12 CONTACTS: Natasha Jackson Marco Lorenzo Glenn Dickerson QUESTIONS???