GETTING TO KNOW YOUR FIXED ASSETS/EQUIPMENT INVENTORY Kathy Schultz.

GETTING TO KNOW YOUR FIXED ASSETS/EQUIPMENT

INVENTORY

Kathy Schultz

PURCHASING & FIXED ASSETS

• Request for Purchase (requisition)– Defining Fixed Assets• Unit cost of $5,000.00 or more (effective 7/1/07)• Complete in itself• Does not lose its identity even though it may become a

component part of another item when placed in use• Life expectancy of 1 year or more

– Special items regardless of cost• revolvers, shotguns, pyrotechnic devices, vehicles

CATEGORIES OF ASSETS

• Equipment • Buildings/Building improvements• Land/Land improvements• Collections • Fixtures• Library books• Intangibles– Effective FY10

PURCHASING & FIXED ASSETS• What makes up the cost?– Shipping/installation/shipping insurance– No:• maintenance agreements• training expenses• supplies

• Funds– State/grant/other (asset type)– “NOTE” screen– Coding (60 vrs 30)

PURCHASING & FIXED ASSETS

BETTERMENTS• What is a betterment? – A betterment of inventoried equipment is any

modification which changes or alters a unit’s original function/design and certain major repairs. Contact BCN Purchasing to determine if a repair is deemed major. The depreciation schedule and the useful life may need to be adjusted.

• Betterment versus repair• Betterment threshold is $5,000.00• Referencing asset tag number• Numbering on inventory list– x.xxxxxxA

FABRICATIONS• What is a fabrication?

– A fabrication is a piece of equipment that is being constructed at the University by University personnel. Generally, each part of a fabrication would not be large enough (over $5,000) to be capitalized and would not function as a separate piece of equipment. There are exceptions, as in lasers, where the parts that make up the finished piece of equipment are over $5,000 but these parts must meet the unable to function alone criterion. If a piece of a fabrication can function on its own, and is over $5,000, it is a piece of equipment and must be tagged separately. A fabrication must, when complete, be $5,000 or over in value.

• Fabrication procedure

– Paperwork– Coding– Life of fabrication– Ending fabrication

LEASE PURCHASE• What is a lease purchase?– Leased equipment can be included on the inventory if it

meets one of the following accounting rules:• 1. it transfers ownership• 2. there is a bargain purchase option• 3. the term of the lease is greater than or equal to 75% of the

equipment’s economic life• 4. the present value of the payments is greater than or equal to

90% of the equipment’s fair value– If you have questions about whether your leased

equipment should be included on your inventory, please contact Philomena McCaffrey at the Controller’s Office (784-4176) for further guidance.

• Lease purchase procedure– Coding (60-LS)

LOAN AGREEMENTS

• Type of Loans:– NSHE institution to outside entity– NSHE institution to NSHE institution– NSHE department to NSHE department• Memorandum of Understanding (MOU)• Signature requirements• Distribution requirements

LOAN AGREEMENTS

• NSHE department to NSHE employee• Equipment Loan Agreement• Signature requirements• Distribution requirements

• Keep a file of all MOU’s and Loan Agreements

ANNUAL PHYSICAL INVENTORY• Why is this important? – Board of Regents’ Policy– Audit exceptions– Responsibility

• Procedure– Verify each asset• Pencil in notes on report• Assets below $5,000.00• Sensitive items (guns, vehicles, artwork)

ANNUAL PHYSICAL INVENTORY

HELPFUL HINTS– Make changes during the course of the year• Property Transfer form• E-mail/memo• Surplus Property Disposal form• List of assets by location code can be downloaded from

CAIS

SURPLUS PROPERTY• How does it work?– Surplus Property Disposal pickup request

• http://www.howler.unr.edu/bcnpurchasing/OnLineForms/SurplusForm.htm

– Procedure• Reutilization• Sales• Donation • Disposal/scrap

SENSITIVE EQUIPMENT• Effective March 1, 2008, the following sensitive items or items subject to

theft must be separately tracked by the responsible department if the items have a value in excess of $2000 and less than $5000:

• 1. Bicycles • 2. Cameras: digital, film, video • 3. Cell phones, two-way radios, individual communication devices • 4. Computers (costing less than $5,000): desktop, servers, laptop, PDAs (regardless of

acquisition cost) • 5. Copy, fax and multifunctional machines • 6. Lawn mowers • 7. Microscopes and telescopes • 8. Music systems and components • 9. Musical instruments • 10. Printers • 11. Scales and balances • 12. Televisions • 13. Video: projectors, recorders, monitors

SENSITIVE EQUIPMENT

• Institutions that wish to inventory additional items may do so at their discretion

• Kept by individual departments– Develop a tracking system– Object/subject codes 30-SE

• Auditors will ask for sensitive equipment list – Description including model, serial number– Responsible person– Transaction number and date– Asset dollar amount– Disposition (if disposed)

ACCOUNTING

• CEPL Report– Reconciles “60” purchases• PO’s/JV’s/P-Card

• Moving asset expenses– Within the current fiscal year– Outside the current fiscal year

• Selling an asset– Reimbursement to account

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