Fixed Assets
Corresponding Policy: See ‘’ policy.
Corresponding Forms: N/AProcess- Finding Out what Additional Text Fixed Assets Require:When entering an invoice into Banner, University Financial Services requests the following information be included in the FOATEXT of the item:
Date Received
Serial Number
Manufacturer
Custodian Name and Custodian ID#
Equipment Manager and Equipment Manager ID#
If the individual inputting or custodian know of or would like to add a better description of the asset than what is on the invoice please include it.
If not, UFS will have to use the invoice which can get tricky, as some items with only have the manufacture's asset number to describe the item
If the asset will be used primarily for instruction or research, please specify
Many times throughout the year UFS receives requests from various state institutions for a listing of items dedicated to these specific areas and it is easier for UFS to run reports if the information has already been entered into the system.
If you have any questions, please call 503-725-9899
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Deciding what should be Capitalized and Seeking Additional Information for Ancillary Charges:Ancillary ChargesThe capitalized cost of the fixed asset should include all ancillary charges necessary to place the asset into service. Examples of ancillary charges include freight and transportation costs, site preparation costs, and professional fees. The additional cost of maintenance agreements and extended warranties are not capitalized because they can be separately identified and are not required to place the asset into service
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Figuring out the Depreciation Method for an Asset:
Each fixed asset has an asset type code to signify the depreciation method and service life.
Each asset type code also refers to the type of personal property or real property so that one has a means for being able to select the appropriate asset type when establishing the asset record on Banner Fixed Assets and for differentiation of assets for various reporting needs.The Controller establishes asset type codes. Asset type codes contain two digits. The first digit denotes the type of fixed asset (personal property or type of real property).
First Digit
Description
Prefix of Asset Type Description
PERSONAL PROPERTY - NOT CAPITALIZED
Expendable Assets (those assets that are not capitalized and therefore
not depreciated). These assets are recorded in Banner Fixed Assets only
for inventory purposes.
REAL PROPERTY - NON-COMPONENTIZED BUILDINGS
Major Improvements to Buildings
REAL PROPERTY - COMPONENTIZED BUILDINGS
Building Component - 50 year
Building Component - 23 year
Building Component - 20 year
Building Component - 15 year
Building Component - 10 year
Major Improvements to Building Component - 50 year
Major Improvements to Building Component - 23 year
Major Improvements to Building Component - 20 year
Major Improvements to Building Component - 15 year
Major Improvements to Building Component - 10 year
REAL PROPERTY – OTHER
Infrastructure and Improvements Other Than Buildings
Land and Land Improvements
PERSONAL PROPERTY – CAPITALIZED
Non-Expendable Assets (those assets that are capitalized and therefore depreciated)
The second digit identifies the type of personal property, building, land, land improvements, improvements other than buildings, or infrastructure.Building component records also require a "user defined code" to identify the type of building component. Refer to
Policy for additional information.
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on the Estimated Useful Life of Various Components:
GENERAL COMPONENTS OF A BUILDING
BUILDING COMPONENT
ESTIMATED USEFUL LIFE (in years)
Building Shell
Site Preparation
Foundation
Steel Frame
Construction Exterior
Floor Structure
Walls-Exterior
Roof Structure
Building Finishes
Roof Cover
Construction Interior
Floor Cover
Building Services Systems
Heating, Ventilation & AC
Fire Protection
Fixed Equipment
Fixed Equipment 20 yr
Fixed Equipment 15 yr
Fixed Equipment 10 yr
IT & Network Infrastructure
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on Components by Asset Type: Building component records in the Banner Fixed Asset system are identified and categorized by a series of asset type and user defined codes. Use the following table as a reference for selecting the asset type and user defined code when adding a new building component record to Banner Fixed Assets.
GENERAL COMPON-ENTS OF A BUILDING
BUILDING COMPON-ENT
ESTIMATED USEFUL LIFE (in years)
User Defined Code
Asset Type Codes
Componentized Buildings
Major Improvementsto Componentized Buildings
Gen Ed, Admin, Instr & Research
Library Museums
Gen Ed, Admin, Instr & Research
Library Museums
Building Shell
Site Preparation
Foundation
Steel Frame
Constru-ction Exterior
Floor Structure
Walls-Exterior
Roof Structure
Building Finishes
Roof Cover
Constru-ction Interior
Floor Cover
Building Services Systems
Heating, Ventilation & AC
Fire Protection
Fixed Equipment
Fixed Equipment 20 yr
Fixed Equipment 15 yr
Fixed Equipment 10 yr
IT & Network Infrastru-cture
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on Capitalizing Real Property:
Real property involves acquisition, new construction, and improvements to existing real property.
Capitalizable ExpendituresExpenditures for real property are by their inherent nature “capitalizable," meaning they are:
Owned or considered owned (refers to capital leases, leasehold improvements) by the University
Held for operations (not resale)
Have a useful life that exceeds one year
Expenditures for improvements to existing real property are capitalizable if they (1) meet the above three conditions and (2) enhances the asset beyond its original functionality and/or materially extends the useful life of the underlying real property asset. Expenditures that merely restore the asset to its original or previously serviceable condition are not capitalizable. Refer to additional guidelines below.
Expenditures funded by tax-exempt bond proceeds are capitalizable if they (1) meet the above three conditions and:
Bond repayment period is no greater than 120% of asset service life.
Project either materially increases the value or life of the asset.
For additional guidelines, an expenditure is considered capitalizable if it:
Improves a condition or defect that either existed prior to the acquisition of the unit of property or arose during the production of the asset, whether or PSU was aware of the condition or defect at the time of acqui
Is for work performed prior to the date the asset was actually placed in servic
Adapts the unit of property to a new or different use (including a permanent structural alteration of the asset);
Results in a betterment (including a material increase in quality or strength) or a material addition (including an enlargement, expansion, or extension) or
Results in a material increase in capacity (including additional cubic or square space), productivity, efficiency, or quality of output of the asset.
Due to a capitalization threshold, not all capitalizable real property expenditures are capitalized in the PSU accounting records. Use of a capitalization threshold avoids having a separate fixed asset record for every one of the numerous low-cost capitalizable items, and having to calculate, record, and report immaterial depreciation amounts on those items.Real property acquisition, construction and improvement projects over the capitalization threshold are generally capitalized in PSU accounting records, and real property acquisition, construction and improvement projects less than capitalization threshold are generally expensed in the accounting records.
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on what is a Component vs an Attachment: Terminology: Parent asset = Permanent Tag recorded in the Primary tag field on Component or Attachment tags. (Synonymous with Primary tag) AttachmentsAttachments are tangible, personal property that have an integral relationship with a Parent asset (they become one). There is no dollar threshold limit on attachments but they must meet the following criteria:
Must have same Responsible Chart, Organization, Location, Grant & Custodian as Parent asset.
Must have same Condition and Title-To as the Parent asset.
Must have same User status as the Parent asset.
Must have same Functional Use as Parent asset.
Must be depreciated and disposed with their Parent asset.
Use account codes 401xx & 402xx for non-proprietary fund asset purchases that meet the criterion of an Attachment.
Use account codes A80xx for proprietary fund asset purchases that meet the criterion of an Attachment.Attachments can also be used to reflect changes to an asset where no physical object is involved. i.e. direct pay credit memos, JV's, "adjustments" from 2.0 conversion acquisition sequences etc.(Note: Attachment costs are automatically added to the Parent Total Cost and Total Net Book Value. Attachment Funding is displayed on the Parent asset as is the Capitalization data.) Depreciation of attachmentsAn attachment's funding and capitalization/depreciation information is added to it's parent asset's funding and capitalization/depreciation records when the attachment is performed in Banner Fixed Assets. Once attached, the attachment depreciates in the parent asset's records over the remaining useful life of the parent asset.
It is PSU policy, that the depreciation start date for all assets (including attachments) is the date the asset is acquired and ready for use. Parent assets have a single stored depreciation start date in Banner. Attachments do not have their own separately stored dep however there is an inferred depreciation start date for attachments. The inferred start date is the date the attachment is performed in the fixed asset system. If the month/year the attachment is performed in Banner Fixed Assets is inconsistent with PSU depreciation start date policy, a fixed asset adjustment must be performed to record depreciation for prior periods not taken for the attachment. ComponentsComponents are tangible, personal property that are related to, but not an integral part of, an existing asset. Components must meet the following criterion:
Must meet all requirements of a standalone capitalized asset.
Are not consumed in the normal course of business.
Have a unit value that meets or exceeds the capitalization threshold.
Have a useful life that exceeds one year.
Are related to, but not an integral part of, an existing asset.
Are depreciated and disposed of separate from Parent asset.
Use account codes 401xx & 402xx for non-proprietary fund asset purchases that meet the criterion of a Component.
Use account codes A80xx for proprietary fund asset purchases that meet the criterion of a Component.Components can have different Responsible Organization, Location, Grant, Custodian, Condition Title-To and Status codes from the Parent asset. (Note: Components must be "unlinked" before disposal of the Component or the Parent asset can occur. This is done with the transfer form FFATRAN.) When purchasing assets that do NOT meet the criterion for capitalized non-expendable assets, attachments or components, use the appropriate (20xxx) supplies expense account codes. Primary, Attachment & Component Relationships
Primary Permanent tags can have both Components and Attachments.
Components can have Attachments but NOT Components.
Attachments can NOT have Components or Attachments.
(Note: If an origination tag was made an Attachment in error, it can later be made into a Component or a standalone permanent tag. Components or standalone tags can NOT later be made into attachments.)
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on what Account Code to Use for Depreciation: The following provides, by each account code for fixed assets, the associated account codes for accumulated depreciation and depreciation expense, and allowable asset types:
Account Type
Account Code
Description
Data Entry
Accum Depr
Depr Expense
Asty codes
Fixed Assets/Acc Depreciation
Fixed Assets
Personal Property
NB-NK,NN-NT
NV,NX,NY,NZ
Construction in Progress (Equip)
NB-NK,NN-NZ
Collections
Museum Collections
Works of Art & Historical Treasures
Library Special Collections
Library Books (General)
Real Property
BA-HL,JG-KL,M%,OG-TL
Construction in Progress (Building)
BA-HL,JG-KL,M%,OG-TL
Easements/Right of Ways
Land Improvements (non-depreciable)
Land Improvements (depreciable)
Construction in Progress (Land Imp)
Improvement Other Than Buildings
Improvement Other Than Buildings
Construction in Progress (IOTB)
Infrastructure
Infrastructure
Construction in Progress (Infrastr)
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on How to Depreciate Based on the Account Code:
Capital Asset Account Code
Depreciated? (Yes/No)
Depreciation Frequency
Depreciation Expense Account Code
Accumulated Depreciation Account Code
Treatment of First Year Depreciation(see notes below table)
Treatment of Additions and Major Improvem-ents(see notes below table)
A8011 – Equipment
A8012 – Vehicles
A8014 - Construction in Progress (Equip)
A8015 – Vessels
A8031 - Museum Collections
A8032 - Works of Art & Historical Treasures
A8033 - Library Special Collections
A8042 - Library Books (General)
A8111 – Buildings
A8112 - Construction in Progress (Building)
A8121 – Land
A8123 - Land Improvem-ents (non-depre-ciable)
A8124 - Land Improvem-ents (depreciable)
A8125 - Construction in Progress - Land Improvem-ents
A8131 - Improve-ment Other Than Buildings
A8132 - Construction in Progress – IOTBs
A8141 – Infrastructure
A8142 - Construction in Progress – Infrastructure
Notes:1 - Proportional - Depreciation begins in month that asset is acquired and ready for use.2 - Half Year - Library additions are added to Banner Fixed Assets at en the depreciation start date is set to the middle of that fiscal year (January 1). The assumption is that, on average, library additions occur proportionately throughout the year.3 - Proportional - Depreciation begins in month that real property is acquired and ready for use (e.g., "substantially complete"), and removed from CIP in Banner Fixed Assets. If the maintenance in Banner Fixed Assets is performed late, one would have to perform "catch-up" depreciation back to the month that the property was completed or "substantially completed."
Additional capitalizable costs to completed or "substantially completed" records will be added at the end of the fiscal year, with depreciation on the additional capitalizable costs to begin on July 1 of subsequent year.
Construction in Progress amounts must be updated in Banner Fixed Assets at least at year-end, but more frequently is more desirable.4 - An addition or major improvement results in a new capital asset record that would have its own depreciation schedule. The new capital asset record would be a "component" of the original asset. See
in procedures manual.
Depreciation pertaining to capital assets of proprietary funds is charged to auxiliary enterprise or service department funds. Depreciation pertaining to other funds is charged to the investment-in-plant fund.
Corresponding Policy: See ‘’ policy.
Corresponding Forms: Process- Finding Out what the Process is for Disposing Equipment:
Portland State University (PSU) is required to dispose of surplus property.
PSU surplus property means all personal property, including lost, mislaid, or abandoned property, vehicles and titled equipment that is worn-out, obsolete, or excess to the institution’s needs or otherwise unsuitable for intended use.
All broken, worn-out and irreparable equipment must be disposed of through .
No individual or department may dispose of equipment without consulting Property Control at 503-725-9899.
All property which is deleted from inventory through surplus sale, scrapping, theft, transfer, or trade-in, must be documented by a
Federally Owned Property or equipment supplied by the Federal Government may require release by the federal agency that provided the funds or the equipment.
Please contact(503-725-3667) or Property Control before disposal.Computers and Other Electronic Storage Devices and Media:
Prior to disposal, PSU will, as applicable, completely erase or otherwise render unreadable all information, data, and software residing on the device unless the information, data, or software is to be conveyed and may be conveyed lawfully.
FAP-Surplus will work with OIT to ensure that data is removed from electronics prior to disposal.
OIT & FAP-Surplus may charge a $10 fee for this service.
Contact OIT Help Desk at 503-725-4357 or e-mail
if you have any questions regarding this process.
Procedure: The following steps should be taken when disposing of PSU property:
Responsible Party
Department
Submit a work order at
Complete a .
Get all necessary signatures. a.
Original should be given to Surplus Property when the equipment is picked up.
Be sure to keep a copy of your department records. Department will house equipment until Surplus Property contacts you
Surplus Property
Surplus will pick-up equipment and issue a pick-up confirmation receipt.
Property Control
Asset record will be updated in inventory database.
Corresponding Policy: See ‘’ policy.Corresponding Forms: N/A Process- Seeking Help on the Accounting for General Library Collections:
(Library adjustments are to be performed annually after June depreciation is posted and before July depreciation is executed. After all fixed asset adjustments for the fiscal year are performed, a final depreciation run is to be executed using a June depreciation date and posted to period 14 to account for year-end additions.)AdditionsAlthough the unit price of a typical general collection volume is less than the PSU capitalization threshold, the total cost of the entire general collection far exceeds the threshold. Therefore, all additions to library general collections are capitalized regardless of amount and depreciated over ten years in the Net Investment In Plant fund 890000. For practical purposes, Banner Fixed Assets is not to be used to separately track the acquisition, depreciation, and disposal of each library book. Instead, Banner Fixed Assets has one fixed asset record for each year's acquisitions for the general collection. (For the GASB 35 conversion, effective June 30, 2001, eleven asset records were established for the general collection: FY1991 and earlier, FY1992, FY1993, FY1994, FY1995, FY1996, FY1997, FY1998, FY1999, FY2000, and FY2001.) The sum of the general library asset records' adjusted cost is to reflect the total historical cost of the general library collection on hand (net of withdrawals) at the end of a fiscal year. The sum of the general library asset records' accumulated depreciation is to reflect the total accumulated depreciation of the general collection on hand (net of withdrawals) at the end of the fiscal year. At the end of each fiscal year, a new general collection record is to be added to the Banner Fixed Assets system using the 'New Tag, Non-Procurement' action type and asset type NL 'NonExp-Library Books and Periodicals' in the Fixed Asset Master Maintenance form (FFAMAST) reflecting the fiscal year's acquisitions. The value of the additions is to be obtained from the 'General Collection Historical Cost' section of the 'Annual Library Valuation Report' and includes values for expenditures recorded using account code 40190 'Library Purchases' (across fund types) as well as FMV of in-kind gifts.The new library record is then to be capitalized on the General Ledger to the fiscal year just ending, using the Banner Fixed Assets 'Ptag capitalization' (SCAP) function of the Fixed Asset Adjustment form (FFAADJF). The resulting capitalization entry debits the asset account A8042 'Library Books (General)' and credits the equity account E1001 'NIP Change in Fixed Assets'. After the capitalization is performed, the depreciation information is then to be established for the record using the Banner Fixed Assets Fixed Asset Depreciation form (FFADEPR). The depreciation method should be straight-line, the salvage value should equal zero and the useful life set to ten years. The depreciation start date is to be set to January first of the fiscal year being reported on the valuation report. Therefore when depreciation is run at the end of the fiscal year, 6 months of depreciation is calculated and posted to period 14 thus resulting in a half year first year depreciation option. For example, if there are additions in Fiscal year 13, a new record is created in July using a January 1, 2013 depreciation start date. - (With the exception of disposals/withdrawals, after 10 years from the depreciation start date, the total accumulated depreciation of a general collection record will agree to the total cost of the volumes acquired 10 years earlier, leaving a zero net book value.)Revenue Recognition of Donations Revenue is to be recognized for library general collection donations received during the fiscal year and is to be recorded against the Net Investment In Plant fund 890000. A journal entry is to be recorded at fiscal year end after the associated capitalization has occurred. The journal entry should credit the appropriate revenue account in the 036xx account series and debit the equity account E1001 'NIP Change In Fixed Assets' in fund 890000. (The debit to the equity account offsets the donation portion of the equity credit that occurs during the capitalization of additions.) DeductionsVolumes are removed from the general collection periodically based on institutional library policy. Volumes that are withdrawn during the fiscal year are to be aged and valued at their historical cost, associated accumulated depreciation is to be determined, and the total general collection values adjusted accordingly at the end of the fiscal year. Accounting treatment for withdrawals of fully depreciated and partially depreciated deductions is essentially the same however the required Banner Fixed Assets maintenance differ slightly:Deductions of Fully Depreciated WithdrawalsInstitutional library withdrawal policy generally indicates that the age of withdrawn volumes exceed ten years. Therefore withdrawals are usually related to volumes that are fully depreciated. For fully depreciated withdrawals, the Banner Fixed Assets subsidiary record values and the General Ledger values must be reduced by the historical cost of the volumes withdrawn. This is achieved by use of the Banner Fixed Assets GL Change-Cap Amount/Account (GLCE) function (sometimes in conjunction with the Write Off (WOFF) function) of the Fixed Asset Adjustment form (FFAADJF). For example, if in a fiscal year, the library had general collection withdrawals of $200,000, the year-end accounting entry would be to reduce both the fixed asset adjusted cost and accumulated depreciation of the oldest library record by $200,000 using a Fixed Asset GLCE adjustment. This presumes that the oldest library record still contains greater than $200,000 in asset cost and accumulated depreciation. If not, the oldest tag should be disposed of using the fixed asset Write Off (WOFF) function adjustment and the residual amount of the entry would be made to the next oldest record using the GLCE function, etc. until the total amount of the withdrawals have been applied.Deductions of Partially Depreciated WithdrawalsIn some instances, PSU might identify disposals that are less than ten years old based on original year of acquisition. Recording of disposals of volumes that are not fully depreciated (less than ten years old) are to be accounted for in the same manner as withdrawals of fully depreciated volumes with the exception that the fixed asset GLCE adjustment be performed against the corresponding fiscal year's library record. The total adjusted cost is to be reduced by the historical cost of the volumes withdrawn and the accumulated depreciation is to be reduced by the amount of accumulated depreciation associated with the withdrawn items. For example, if in FY2013, the university disposes of $100,000 of library books that were originally acquired in FY2008, the Banner Fixed Assets GLCE adjustment would be processed against the FY2008 record reducing the total adjusted cost by $100,000 and accumulated depreciation by $55,000 (Historical Cost/useful life X age, $100,000/10 X 5.5 (Jan 01, 2008 - Jun 30, 2013)).
Insurance, Replacement ValuesInsurance and replacement values are to be adjusted annually based on the 'General Collection Replacement Cost' section of the 'Annual Library Valuation Report'. The replacement values are established each year by the Inter-Institutional Library Council.
These values are to be adjusted at fiscal year-end only after the FWRFAAX 'Fixed Assets - Inflation Factor' program has run and after all other library general collection adjustments have been performed.The insurance and replacement values of each library general collection fixed asset tag is to be set to the prorated value of the total general collection replacement cost per the annual library valuation report. The proration is to be based on total adjusted cost of all the general collection records. The update is performed via the Banner Fixed Assets 'Permanent Tag - Update Asset' action in the Fixed Asset Master maintenance form (FFAMAST). For example, if in FY '13 the total general collection replacement cost per the annual valuation report is $10,000,000 and the sum of the total adjusted cost of all library general collection records is $8,000,000, the insurance and replacement values of each individual general collection record should be set to 125% of the individual records adjusted cost. The formula is: individual record's insurance & replacement cost = (individual records adjusted cost / sum of all general collection record's adjusted cost) X total replacement cost. Restated it is: Individual record's insurance & replacement cost = individual records adjusted cost X (total replacement cost / sum of all general collection record's adjusted cost). In the example, individual records adjusted cost X ($10,000,000 / $8,000,000) or 1.25 or 125% of the individual records adjusted cost.
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Help on the Accounting for Special Library Collections:Additions Although the unit price of a special collection volume may be less than the PSU capitalization threshold, the total cost of the entire special collection far exceeds the threshold. Therefore, all additions to library special collections are capitalized regardless of amount in the Net Investment In Plant fund 890000. For practical purposes, Banner Fixed Assets is not to be used to separately track the acquisition, and disposal of each special collection volume. Instead, Banner Fixed Assets has one fixed asset record for each special collection, or group of special collections. It is generally desirable (but not required) to have a separate record for each separately identifiable special collection. The sum of the library special collection asset records' adjusted cost is to reflect the total historical cost of the library special collections on hand (net of withdrawals) at the end of a fiscal year. (Library special collections do not depreciate.) At the end of each fiscal year, any additions to library special collections need to be accounted for in the Banner Fixed Assets system and the General Ledger. The value of the additions is to be obtained from the 'Special Collection Historical Cost' section of the 'Annual Library Valuation Report' and includes values for expenditures recorded using account code 40190 'Library Purchases' (across fund types) as well as FMV of in-kind giftsAdditions to existing special collections are processed against the existing special collection records using a Banner Fixed Assets write up (WRIT) function of the Fixed Asset Adjustment form (FFAADJF). Additions of new special collections may be added in the same manner to existing special collection records via a write up or may be added to Banner Fixed Assets as separate records. Additions of new special collections added as separate records are to be created using the 'New Tag, Non-Procurement' action type and asset type NA 'NonExp-Art/Exceptional' in the Fixed Asset Master Maintenance form (FFAMAST). New special collection records are then to be capitalized on the General Ledger to the fiscal year just ending, using the Banner Fixed Assets 'Ptag capitalization' (SCAP) function of the Fixed Asset Adjustment form (FFAADJF). The resulting capitalization entry debits the asset account A8033 'Library Special Collections' and credits the equity account E1001 'NIP Change in Fixed Assets'.Revenue Recognition of DonationsRevenue is to be recognized for library special collection donations received during the fiscal year and is to be recorded against the Net Investment In Plant fund 890000. A journal entry is to be recorded at fiscal year-end after the associated capitalization has occurred. The journal entry should credit the appropriate revenue account in the 036xx account series and debit the equity account E1001 'NIP Change In Fixed Assets' in fund 890000. (The debit to the equity account offsets the donation portion of the equity credit that occurs during the capitalization of additions.)
Deductions Volumes are removed from the special collection periodically based on PSU library policy. Volumes that are withdrawn during the fiscal year are to be aged and valued at their historical cost and the total special collection values adjusted accordingly at the end of the fiscal year. For example, if in a fiscal year the library had withdrawals of $150,000 worth of special collection volumes, the year-end accounting entry would be to reduce the fixed asset adjusted cost of the associated library special collection record(s) by $150,000 using a Fixed Asset write down (WRIT) adjustment. Insurance, Replacement Values Insurance and replacement values are to be adjusted annually based on the 'Special Collection Replacement Cost' section of the 'Annual Library Valuation Report'. The replacement values are established each year by the Inter-Institutional Library Council.
These values are to be adjusted at fiscal year-end only after the FWRFAAX 'Fixed Assets - Inflation Factor' program has run and after all other library special collection adjustments have been performed.The insurance and replacement values of each library special collection fixed asset tag is to be set to the prorated value of the total special collections replacement cost per the annual library valuation report. The proration is to be based on total adjusted cost of the special collection records. The update is performed via the Banner Fixed Assets 'Permanent Tag - Update Asset' action in the Fixed Asset Master maintenance form (FFAMAST). For example, if in FY '03 the total special collection replacement cost per the annual valuation report is $10,000,000 and the sum of the total adjusted cost of all library special collection records is $8,000,000, the insurance and replacement values of each individual special collection record should be set to 125% of the individual records adjusted cost. The formula is: individual record's insurance & replacement cost = (individual records adjusted cost / sum of all special collection record's adjusted cost) X total replacement cost. Restated it is: Individual record's insurance & replacement cost = individual records adjusted cost X (total replacement cost / sum of all special collection record's adjusted cost). In the example, individual records adjusted cost X ($10,000,000 / $8,000,000) or 1.25 or 125% of the individual records adjusted cost.
Corresponding Policy: See policy. Corresponding Forms: N/AProcess- Seeking Additional Help on Distinguishing Between Various Non-Building Real Property
To provide for consistency in coding, the following provides a categorization of types of real property other than buildings and an associated account code (IOTB, infrastructure, or land improvement) and corresponding asset type:
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Deciding what should be Capitalized and to what Account for Non-Proprietary Funds:
Account Codes Used in Non-Proprietary Funds
Type of Capital Asset
Capitalization Threshold
for PURCHASE
for CAPITALIZATION in Investment in Plant Fund
Equipment, Livestock, Vehicles, Vessels
Unit cost ≥ $5,000
40101 - Equipment40102 - Livestock40104 - Vehicles40201 – Vessels
A8011 - Equipment (also used for Livestock)
A8012 - VehiclesA8015 - Vessels
Museum Collections
Total cost of museum collection ≥ $5,000
40103 - Artwork/Collection Items
A8031 - Museum Collections
Works of Art and Historical Treasures
Unit or total cost of artwork ≥ $5,000
40103 - Artwork/Collection Items
A8032 - Works of Art & Historical Treasures
Library Special Collections
Total cost of collection ≥ $5,000
40190 - Library Purchases
A8033 - Library Special Collections
Library Purchases (General Books, not online subscriptions)
University library purchases are capitalized regardless of amount.
Online subscriptions & departmental library purchases are expensed.
40190 - Library Purchases
A8042 - Library Books (General)
All acquisitions of land are capitalized regardless of amount. Purchases
of buildings require that a portion of the cost be allocated to land.
Land purchases may only be charged to unexpended plant funds (fund type 81). Account code 403xx, except 40303 and 40304
A8121 - Land
Land Improvements
Land Improvements ≥ $75,000
Account code 40303 - 40319.See Note 1
A8123 - Land Improvements (non-depreciable) A8124 - Land Improvements (depreciable)
All buildings ≥ $50,000 are capitalized. Purchases of buildings require that a portion of the cost be allocated to land.
Building purchases and construction may only be charged to unexpended plant funds (fund type 81).Account code 405xx
A8111 - Buildings
Buildings - Additions
Total cost of additions ≥ $100,000.
Construction of building additions are charged to unexpended plant funds (fund type 81).
Account code 405xx .
A8111 - Buildings
Buildings - Major Improvements
All major improvements - See
- Additional Clarifications.
Account code 405xx.See Note 1
A8111 - Buildings
Buildings - Normal Repair and Maintenance
Not capitalized
Use a maintenance/repair 235xx account code.
Not capitalized
Buildings - Major Repair and Maintenance
Not capitalized
Use a maintenance/repair 235xx account code.See Note 1
Not capitalized
Improvements other than Buildings (IOTBs)
IOTBs ≥ $50,000
Account code 404xx.See Note 1
A8131 - Improvement Other Than Buildings
Infrastructure
Infrastructure ≥ $75,000
Account code 407xx.See Note 1
A8141 - Infrastructure
Additions or major improvements to IOTBs or infrastructure should be accounted for the same way as new IOTBs or new infrastructure.Acquisitions of fixed assets not meeting the above capitalization thresholds should be recorded as an expense in the accounting records. (Note: The unit cost threshold does not apply to personal property attachments, however the threshold does apply to the asset as a whole.)Note 1: Expenditure may only be made from fund types 11 - Budgeted Operations (fund series 004000), 81 - Unexpended Plant Funds and 83 - Renewal and Replacement Funds.
Corresponding Policy: See ‘’ policy.Corresponding Forms: N/A Process- Trying to Figure out the Accounting for Personal and Real Property when they are Obtained by a Gift:
Gifts of personal property and real property are accounted for as revenue in the year of receipt and either as an expense (if consumed in current year) or capitalized as an asset and depreciated in current and subsequent years.Non-capitalizable gifts of personal property should be recorded by JV as a revenue using the appropriate 03xxx account code and an expense using the appropriate 2xxxx account code. Non-capitalized gifts of personal property consumed in the current year are not capitalized or recorded in Banner Fixed Assets.Capitalizable gifts of personal property and real property should be accounted for as follows:
Submit a report showing gifts of capitalizable personal property and real property to PSU’s Fixed Asset team in CAS for inclusion in the Fixed Assets System and Finance Ledgers.
For real property, the report should include the name of the donor, legal description, the use to which the property is dedicated, and the estimated value segregated between buildings, land, improvements other than buildings (IOTBs), infrastructure, and land improvements.
Create records for each asset in the Banner Fixed Asset System using the Master Maintenance form (FFAMAST) utilizing the Gift/Donation action.
Capitalize the records using the Fixed Asset Adjustment form (FFAADJF) using the SCAP Ptag Capitalization function to post to the capitalization entries to the appropriate auxiliary enterprise, service department, or investment in plant funds.
Recognize the gift revenue via Journal Voucher. – by crediting the appropriate 03xxx account code against the asset's capitalization fund/FOAPAL where depreciation will be charged and debit the same fund using account E1001.
Corresponding Policy: See ‘’ policy. Corresponding Forms: N/AProcess- Seeking Additional Help on the Accounting for Property that is Considered Owned by PSU:
Expenditures for personal property or real property are capitalized if the property is owned or “considered owned” by the university.
“Considered owned” refers to capital leases, leasehold improvements and “conditionally owned” assets purchased with grant/contract funds. If PSU does not obtain, or reasonably expect to obtain title to the property, the costs should be expensed and not capitalized.Property is considered “conditionally owned” if the grant terms provide for title to be transferred to the university at the end of the grant pending receipt of final reports.
Conditionally owned assets are “considered owned” and capitalized and depreciated in the Banner Fixed Assets system from date of original purchase or when the asset is placed into service.If the terms of the grant do not provide for transfer of title, the expenditures for the property are expensed and not capitalized.
If the grantor does later transfer title to the university, the university should record the property as an
as of the date the title is transferred.
Valuation of the asset should be determined based on the fair market value at time of ‘donation’. If fair market value cannot be readily obtained, an acceptable approximation can be made by determining what the net book value of the asset would have been had it been capitalized and depreciated from date of original purchase from the grant/contract fund.
Refer to the Personal Property & Real Property Obtained by Gift section in the
for more information.
Expenditures for property purchased from grant/contract funds for which PSU does not obtain title or reasonably expect to obtain title are to be expensed and not capitalized in the accounting records. The property expenditure may still be recorded in the grant funds using the capital outlay 4xxxx account codes however a corresponding capitalization entry should not be done. This may be achieved by using accounts
‘Non-State Equipment’ or
‘ Non-OUS Equipment. The property may be recorded in the Banner Fixed Asset system for inventory and/or insurance purposes as a non-capitalized fixed asset with a non-PSU owned title-to code. (Account codes, 40104 & 40201 automatically create capitalization entries when used in Banner invoices and therefore should not be used for equipment on grants if PSU does not expect to obtain tile.)
Corresponding Policy: See
policy. Corresponding Forms: N/AProcess- Deciding what Should be Capitalized and to what Account for Proprietary Funds:
Account Codes Used in Proprietary Funds
Type of Capital Asset
Capitalization Threshold
for PURCHASE
for CAPITALIZATION in Investment in Plant Fund
Equipment, Livestock, Vehicles, Vessels
Unit cost ≥ $5,000
A8011 - Equipment (includes livestock) A8012 - Vehicles A8015 – Vessels
Museum Collections
Total cost of museum collection ≥ $5,000
A8031 - Museum Collections
Works of Art and Historical Treasures
Unit or total cost of artwork ≥ $5,000
A8032 - Works of Art & Historical Treasures
Library Special Collections
Total cost of collection ≥ $5,000
Not applicable to proprietary funds.
Not applicable to proprietary funds.
Library Purchases (General Books, not online subscriptions)
University library purchases are capitalized regardless of amount.
Online subscriptions & departmental library purchases are expensed.
Not applicable to proprietary funds.
Not applicable to proprietary funds.
All acquisitions of land are capitalized regardless of amount. Purchases
of buildings require that a portion of the cost be allocated to land.
Land purchases may only be charged to unexpended plant funds (fund type 81). Account code 403xx, except 40303 and 40304
A8121 - Land
Land Improvements
Land Improvements ≥ $75,000
See Note 1
A8123 - Land Improvements (non-depreciable) A8124 - Land Improvements (depreciable)
All buildings ≥ $50,000 are capitalized. Purchases of buildings require that a portion of the cost be allocated to land.
See Note 1
A8111 - Buildings
Buildings - Additions
Total cost of additions ≥ $100,000.
Construction of building additions are charged to unexpended plant funds (fund type 81) Account code 405xx
A8111 - Buildings
Buildings - Major Improvements
All major improvements - See
- Additional Clarifications.
Account code 405xxSee Note 1
A8111 - Buildings
Buildings - Normal Repair and Maintenance
Not capitalized
Use a maintenance/repair 235xx account code.
Not capitalized
Buildings - Major Repair and Maintenance
Not capitalized
Use a maintenance/repair 235xx account code.See Note 1
Not capitalized
Improvements other than Buildings (IOTBs)
IOTBs ≥ $50,000
Account code 404xx. See Note 1
A8131 - Improvement Other Than Buildings
Infrastructure
Infrastructure ≥ $75,000
Account code 407xx.See Note 1
A8141 - Infrastructure
Additions or major improvements to IOTBs or infrastructure should be accounted for the same way as new IOTBs or new infrastructure.Acquisitions of fixed assets not meeting the above capitalization thresholds should be recorded as an expense in the accounting records.Note 1: Expenditure may only be made from fund types 11 - Budgeted Operations (fund series 004000), 81 - Unexpended Plant Funds and 83 - Renewal and Replacement Funds.
Corresponding Policy: See
policy. Corresponding Forms: N/AProcess- Figuring out How to Make Corrections to a Fixed Asset:
Corrections of Fixed Assets/Accumulated Depreciation general ledger data and Banner Fixed Assets record data are to be made using the Banner Fixed Assets system forms whenever possible. The use of journal vouchers should be rare.
Once a record has been created in Banner Fixed Assets, subsequent corrections should be made to the existing record. (Records should not be removed and new records created to correct an asset's information. Doing so overstates additions and deductions during the yearend fixed asset analysis for the annual financial statements.)
Costs are often incurred for an addition or major improvement that pertains to an existing asset in Banner Fixed Assets. This would suggest that one update or correct the existing capital asset record in Banner Fixed Assets. However additions or major improvements of real property should be added as additional records to the Banner Fixed Assets module. Once an asset has been entered into the Banner Fixed Assets and started to depreciate, no changes should be made to the asset type or service life of the asset. Exceptions need to be approved by the Controller or designee.