fixed asset capitalization criteria.doc

TMA Policies and Procedures Manual of 14

TMA Systems Policies and Procedures Manual

Index

TMA Fixed Asset Management System – Section 11. Introduction 2. Purpose of Asset Recording Program 3. The TMA Database 4. Role of the Property Management Office 5. Definition of Fixed Assets 6. Other Definitions Concerning Assets 7. Identifying Assets to be Tagged 8. Procedure for Removing or Relocating Assets 9. Department Responsibilities 10. Appendix C. Property Movement Form

TMA Work Order Management Module – Section 215. TmaTalk 16. Appendix D. TMA TALK Entry Screens

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Section 1Fixed Asset Management System

Introduction to TMA Fixed Asset Management System The purpose of this section is to introduce fixed asset accounting concepts and to provide the users of the TMA fixed asset management system an understanding of the policies and procedures used by Pace University in controlling its capital assets.

Purpose of the Asset Management ProgramAsset management is an important part of an efficient, professionally administered organization. Prudent business practices help protect the University’s multi-million dollar investment in equipment, and support its educational, research and administrative missions by:

Easily identifying availability of equipment Saving money by reducing waste, redundancy and equipment loss. Maintaining audit compliance with timely and accurate property reports Planning future replacement of equipment Providing data to obtain indirect cost recovery for equipment depreciation Allowing the University to have an accurate record of its investment in equipment (fire and

casualty insurance valuation) Facilitating tracking and recording of maintenance and warranty information

The TMA Database The core component of an efficient asset management system at Pace is the TMA database. TMA is a central, auditable property record for the University that provides crucial information relative to its assets. It can locate a piece of equipment by searching for its tag, serial, model, or purchase order number. It can also assist with tracking leased or loaned equipment or other assets for which the University is responsible. These records are the basis for filing required reports for sponsor funded projects as well as financial and administrative reporting. Information from TMA also paints a picture of property purchase trends for the University

Role of the Property Management Office Answering policy related questions, and providing assistance with property management issues

as they arise (purchasing procedures, accounting codes, property movement, sale, disposition…) Properly tagging all University assets in a timely manner. Maintaining TMA, the central database of all University assets. Producing queries and reports for financial reporting and administrative functions. Tracking all capital assets from the date of acquisition through their disposal.

Definition of an Asset Assets to be tracked in TMA include capital assets and controlled assets.

Capital AssetsTo qualify as a capital asset, the item must meet the following requirements:

It must be real property (no services, software or publications)

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The unit cost should be $500 or more It has a useful life of at least 1 year It must be purchased for Pace University’s use (items purchased for the purpose of

donating to other institutions do not qualify) In some cases, multiple items can be grouped together as a multi-component asset,

even though individually they would not qualify. Examples of this would include: “table and chairs” or “desk and return” Please see “Multi-Component Assets” for more details.

Controlled AssetsThe following items are considered “Controlled Assets” by Pace University and are tracked solely for control purposes. There is no minimum cost requirement for a controlled asset.

Printers

ExclusionsThe item must not lose its identity through fabrication or incorporation into a different or more complex unit or substance (for example, it is not a computer memory chip or software license).

Other Definitions Concerning Assets Construction in ProgressA Capital Projects Fund is used to account for the construction of a capital asset. As construction progresses cumulative expenditures are capitalized as Construction in Progress (CIP) in the General Fixed Assets Account Group. Upon completion of the capital asset, the balance in the CIP fund is transferred to the appropriate account such as Building or Equipment.

Self Constructed AssetsWhen the University utilizes internal staff, resources, equipment and/or materials to construct an item that meets the capitalization criteria an acquisition cost will be established and the item will be entered into TMA as a newly acquired asset.

Works of ArtThe University should capitalize works of art, historical treasures, and similar assets at their historical cost or fair market value at date of donation.

Improvements or BettermentsProper accounting practice calls for the retirement of a component unit and capitalization of its replacement unit only if the replacement substantially increases the value, the capacity/capability, or useful life of the asset system.

Multi-Component AssetMany assets consist of multiple components. This is particularly true for personal computer accessories. The University has decided to control each personal computer as a system (CPU plus monitor). Another example would be a desk with return. A multi-component asset has the following characteristics:

Consists of multiple property units which function together as a single fixed asset

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Individual sub-unit costs are generally not significant in comparison to the total cost of the entire system.

Individual sub-units do not meet capitalization requirements. When a sub-unit is replaced it generally does not extend the life of the system. Each sub-unit is integrated and configured in such a way as to make identification of individual

components difficult.

Leased AssetsThe National Council on Governmental Accounting requires that a lease agreement, that satisfies the criteria established by Financial Accounting Standard 13 (FAS-13), be capitalized.

RepairsOrdinary repairs or expenditures made to maintain assets in operating condition, replacement of minor parts, adjustments, and cleaning are treated as normal operating expenses and should not be capitalized.

Identifying Assets to be tagged The Purchasing Department will be responsible for identifying all capital and controlled assets to be tagged. To assist in this process all capital assets must be purchased using a purchase order and charged to object code 7C51. Purchase orders with qualifying purchases are then photocopied to begin the process of asset tagging.

Instructions for Completing the Property Relocation Form The Property Movement form must be completed online. Please fill in as much information as possible including all of the required fields (see below, required fields in bold). If you have any questions you may call the Property Coordinator at extension 2779. After completing the form, select the Submit/Print button, sign the paper copy, and obtain the signatures of the Department Head and Vice President/Dean responsible for the area where the asset is located. The form must then be brought to a Security office to be signed. Note: No authorization is considered valid unless an authorized Security representative has signed it.

Property Movement Application (see Appendix C)1. Date – enter date form is completed2. Tag Number – from “Property of Pace” label, a unique nine digit identifier used to record

asset in TMA system3. Model Number - enter model number4. Serial Number - enter serial number5. Description – simplest description of asset, ex. personal computer, chair, desk, printer6. Property is being: select removed, retired or relocated7. If asset is being removed or relocated, please explain8. If asset is being retired please explain9. From – Campus – enter campus10. From – Building – enter building11. From – Room - (must be a number. ex. “Conference Room” is invalid, 100 is valid) 12. To – Campus – enter campus13. To – Building – enter building14. To – Room - (must be a number. ex. “Conference Room” is invalid, 100 is valid)15. Department Head Authorization – signature required for removal or retirement of

property.

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16. V.P. or Dean – signature required for removal or retirement of property.17. Requested by – enter e-mail address18. Requested by – enter extension19. Requested by – signature required20. Requested by – enter date for completed21. Department Authorization – signature required22. Department Authorization Date – date signed by department head23. Security Office – signature of local Security Office 24. Property Coordinator – signature of Property Coordinator25. Submit/Print click submit/print when form is completed

Department Responsibilities All Department Heads

Department Heads will periodically be sent an inventory of all Capital Assets in their area. They will be responsible for verifying that all items on the list are accounted for and identifying any additional items to be included. Department Heads must be familiar with the definition of an asset to make this determination.

Buildings & Grounds The B&G department is responsible for understanding and enforcing the relocation/removal of

assets procedures. B&G staff should not remove or relocate any item bearing a “Property of Pace” label unless a Property Movement Authorization is provided. Please refer individuals not in compliance to the Property Coordinator at extension 2779.

Construction Manager The Construction Manager should ensure that any changes or additions to the capital assets of

the University discussed at the Major Projects meetings be included in the meeting minutes and forwarded to the Property Coordinator.

Major Projects - The Construction Manager is responsible for documenting all changes or additions to capital assets and enforcing the policies and procedures of the Capital Asset Recording Program outlined in this manual.

Property Coordinator Answering policy related questions and providing assistance with property management issues

that arise (purchasing procedures, accounting codes, property movement, sale, disposition…) Properly tagging all University assets in a timely manner. Maintaining TMA, the central database of all University assets. Producing queries and reports for financial reporting and administrative functions. Tracking all assets from the date of acquisition through their disposal.

Purchasing Department The Purchasing Department is responsible for identifying assets purchased by the University and

capturing the information for tagging. Purchasing agents should be familiar with the definition of an asset and should review all

outgoing purchase orders for qualifying assets.

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If an asset is identified, a copy of the purchase order should be forwarded to the appropriate area. Orders for equipment such as printers, PC’s and monitors should be forwarded to the Integration unit of DoIt. All others go to the Property Coordinator.

Security The Security department is responsible for verifying “Property Movement Authorizations”.

Please read the form carefully and sign it only if it is completely and properly filled out and has the required signatures. The original copy of this form should be sent to the Property Coordinator, and a photocopy is given back to the originator.

Questions or CommentsAnyone having questions or comments concerning policy and procedures should be referred to the Property Coordinator at extension 2779

Section 2TMA TALK

Introduction to Section 2 The purpose of this section is to introduce TmaTalk, an on-line work order management system. This system provides a web interface for users to enter new Work Order Requests, or check on the status of those that are pending.

Entering Work Requests (see Appendix B)1. To enter a work request, begin by launching your web browser and going to http://tmatalk.pace.edu. 2. The TMA Service Desk page will appear and should automatically link you to the Pace Production page

after 10 seconds. On the Pace Production page select “submit a request”3. Select your campus and click next (>>). 4. Select your building and click next again. 5. On the Request Form please fill in the following fields:

a. Name – name of person submitting requestb. Phone Number - extension of requestorc. E-mail Address – e-mail address of requestord. Service Center – local service department (Example. Briarcliff uses BCBG “Briarcliff B&G”)e. Area – department responsible for area being servicedf. Account Number – account number of responsible departmentg. Tag Type - if work is being performed on a capital asset please select “Asset”h. Tag Number – tag number is located on the Property of Pace label affixed to all assets.i. Request – describe the details of request (Ex: please fix bathroom toilet – handle broken)

6. After all the fields are completed, click the submit button and print a copy of the confirmation for your records. You will be sent a notification that your request was received and another when it has been completed.

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http://tmatalk.pace.edu/


Appendix C – Property Movement Form

Pace University

AUTHORIZATION TO REMOVE/RELOCATE PROPERTY

The University's property management system provides the necessary record keeping to ensure appropriate resource allocation and to reduce unnecessary capital expenses. The accuracy of our records is the responsibility of all departments. Your cooperation in completing this form will ensure the accuracy of our system and the valuable information it provides. The removal of University property (excluding maintenance/repairs), from its designated location, can only be authorized via the completion of this document. Under no circumstances are individuals permitted to unilaterally remove University property that is not permanently classified as portable (i.e. vehicles, laptops, etc.). Please complete a separate form for each item that is tagged as a physical asset of the University (tags are located on the bottom or rear of items). Untagged assets (i.e. desk lamps, adding machines, etc.) must also be identified and their removal through the completion of this form.

DATE: *TAG NO.: MODEL NO.: SERIAL NO.:

Description of Property:

Property is being:

Removed from Campus. Relocated on Campus. Retired from service/discarded.

A. If property is being removed/relocated please explain:

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B. If property is being retired/discarded please explain (removal for personal use must be separately approved):

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A. If property is being relocated please provide the following information:

FROM:

Campus/Offsite Location

Building

Room Number

To:

Campus/Offsite Location

Building

Room Number (if not sure identify floor).

B. If property is being retired/discarded & approved for personal use the following signatures are required:

Department Head:

Vice President/Dean:

Route form in the following order:

REQUESTED BY:

*Email

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11

9

12

10

13

14

15

16

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*Extension

SIGNATURE:

DATE:

DEPT. AUTHORIZATION:

SIGNATURE:

DATE:

SECURITY OFFICE:

PROPERTY MANAGEMENT OFFICE: (for tagged assets only).

PLEASE PRINT COMPLETED FORM FOR DEPARTMENT RECORDS

* Required Information

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Appendix D - TMA TALK Entry Screens

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fixed asset capitalization criteria.doc

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