Standard Operating Procedures

SUBJECT: Asset Merge
SOURCE: Capital Asset Management, Office of the Treasurer
ORIGINAL DATE OF ISSUE: July 25, 2003
DATE OF
LAST REVISION
March 2010
CSOP NO: 15.0
RATIONALE: Assets are merged that should have been created as a single unit when the original asset was purchased; or to merge a new capital asset to an existing asset so that it extends the life of the original asset.
CSOP: The following conditions must be met before assets can be merged:

The merged asset must result in a true system and meet the university capitalization threshold for moveable equipment.

See Accounting Administration Policy FIN-ACC-I-150 Capitalization of Moveable Equipment
See CSOP 8.0 Capitalization of Moveable Equipment

Only assets with the same depreciable life can be merged.

Only assets that were created within the same fiscal year can be merged.

Assets that are federally owned should not be merged into assets that are university funded, or federally funded.

Federally owned object codes are as follows:
Description Object Code
Capital Equipment Fed Owned 7031
Computer Equipment Fed Owned 7036
Intangible Software Fed Owned 7263
Transfer-in Capital Fed Owned 7731
Moveable Fabricated Fed Owned 7531

An asset merge should not be issued until all pending transactions for both the target asset and the asset to be merged have been approved. To confirm if pending transactions exist, go the Capital Asset Maintenance Screen in KFS and click on the Document Button.

Different asset categories such as moveable equipment and fabricated equipment cannot be merged together.

An in-progress fabricated asset cannot be merged to a completed fabricated asset. An in-progress fabrication is identified by the asset type of "40000". It is acceptable to merge an in-progress fabrication asset with another in-progress fabrication.

An in-progress moveable asset with an asset type (40004) cannot be merged into a completed moveable asset. The in- progress asset should have the asset type code set to that of the target asset before merging the asset. It is acceptable to merge an in-progress moveable asset with another in-progress moveable asset.

The owner account on the asset to be merged should match the owner account of the target asset. When they do not match, an Asset Transfer Document should be processed so the owner accounts match.

The target asset must be an active capital asset in KFS.
  1. Merge an asset to be a single individual asset
  2. Merge an upgrade that extends the life of the target asset
  1. Merge an asset to be a single individual asset

    Upon physical inspection, if it is determined that two or more assets have been created that should be combined (merged) into one asset, the asset representative should contact their Campus Capital Asset Office to process the merge. The organization will need to provide the following information:

    • Why the asset needs to be merged
    • IU tag number the asset will be merged into

  2. Merge an upgrade that extends the life of the target asset

    If an upgrade meets one of the items listed below it may be merged (capitalized). Otherwise the upgrade should be expensed and therefore should not be merged into an existing asset.

    • A substantial increase in the functionality of the equipment which allows it to function or perform tasks it was previously incapable of performing.
    • A substantial increase in the efficiency of the equipment, that is, an increase in the level of service provided by the equipment without the ability to perform additional tasks.
    • An extension of the estimated useful life of the equipment.

    If you feel an asset should be merged that does not meet the outlined conditions please contact your Campus Capital Asset Office.
DEFINITIONS: Systems are defined as components that work together to perform one function. These components must be necessary for the system to function.

The Target Asset is the asset to which another asset is added to, in the merge process.

Equipment - The term "equipment" includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.

Fabricated Asset - A fabrication is a moveable asset created (built) by a university organization.
CROSS REFERENCE: CSOP 8.0 Capitalization of Moveable Equipment
CSOP 12.0 Capitalization of Fabricated Equipment
Accounting Administration Policy FIN-ACC-I-150 Capitalization of Moveable Equipment
Accounting Administration Policy FIN-ACC-I-170 Capital Movable Asset Physical Inventories,
      Tagging and Location Changes
RESPONSIBLE ORGANIZATION: Campus Capital Asset Office