|SUBJECT:||Capitalization of Found Equipment|
|SOURCE:||Capital Asset Management, Office of the Treasurer|
|ORIGINAL DATE OF ISSUE:||July 2010|
|RATIONALE:||To provide guidelines for reporting found capital assets.|
|CSOP:||There are two situations where an asset may need to be capitalized as found equipment.
On the add asset document for "found" equipment, the University Capital Asset Office will enter the Account Number, Object Code and Net Book Value or Fair Market Value of the equipment based on the original procurement information, or information supplied by the organization.
The accounting entries are then created based on the financial information entered into the payment section of the add asset document. The account will see offsetting entries to the expense object code 7701 and to expense object code 4997 capital asset adjustment. The entries offset, having no effect on Cash or Fund Balance.
Transaction entered on the add an asset document:
Transaction Generated by the add an asset document:
The only information supplied on the add asset document in this example was Account 1270000, Object Code 7701 and a Net Book Value of $6,500.00. The remaining entries were generated by the add asset document and the Capitalization Process.
|DEFINITIONS:||Capital Assets must have an acquisition value of at least $5,000 and a useful life expectancy of one year or greater.
Equipment - The term "equipment" includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.
Found capital assets are those assets that were retired in error, or incorrectly coded as non-capital in a prior fiscal year.
|CROSS REFERENCE:||CSOP 4.0 Physical Inventories
CSOP 7.0 IU Gifts
CSOP 8.0 Capitalization of Moveable Equipment
CSOP 40.0 Transfer-in Capital Assets
Accounting Administration Policy FIN-ACC-I-150 Capitalization of Moveable Equipment
Using Movable Capital Equipment Object Codes in Financial Documents
|RESPONSIBLE ORGANIZATION:||Office of the Treasurer, Capital Asset Management|