D-600.1 Fixed Asset Accounting

College Resources shall be accounted for under generally accepted accounting principles applicable to governmental entities and per the Wisconsin Technical College System (WTCS) Financial and Administrative Manual (FAM).

College Resources will be inventoried, protected, and accounted for as outlined herein.

CAPITAL PROPERTY

Any equipment item, unit, or set is to be capitalized if the cost (or value in the case of donated property) is at least $5,000 and has a useful life of two (2) or more years.

Any land, building, building improvement, land improvements, or leasehold improvement is to be capitalized if the cost (or value of the donated property) is at least $15,000 and has a useful life over two (2) years. If the procurement is part of a major expansion (total cost of the project is $100,000 or more), all property purchased under such project with a useful life of two (2) or more years will be capitalized regardless of whether an individual item, unit, or set meets the $5,000 threshold. The Business Office is to provide an audit report to the Supervising Executive and President/District Director on capitalized property with an original cost of over $5,000, which could not be accounted for during the inventory process.

INVENTORY PROPERTY

Inventoried assets include capital assets and individual physical assets valued over $1,000 with a useful life over two (2) years or those physical assets less than $1,000, which can easily be converted to cash or personal use.

All inventoried property shall be tagged under College Policies and Procedures maintained by the Business Office. The Business Office shall keep detailed records of inventoried property including, but not limited to, a description of the property, asset identification (“tag”) number issued, cost, custodial designee, and depreciation information. Physical verification of the inventoried property may be accomplished on a rotating basis, but no items shall have a verification span exceeding three (3) years.

Audio-visual aids purchased with equipment to utilize them are considered separate purchases for the cost threshold. When licensing agreements are procured in conjunction with the purchase of audio-visual aids, the agreement and the aids are to be considered a single procurement for purposes of the cost threshold. When software is purchased in conjunction with the hardware on which it will operate, the software and hardware are to be considered a single procurement and accounted for as such. When licensing agreements are procured with the purchase of software, the agreement and the software are to be considered single procurements and accounted for as such. Stand-alone software costing less than $5,000 will not be inventoried.

Repairs and maintenance costs that keep fixed assets in standard operating condition during their normal life cycle shall be expended. However, if the repair arrests the deterioration and prolongs the life of the asset for two (2) or more years or significantly improves its value, it shall be inventoried/capitalized, provided the repair and maintenance costs exceed the asset threshold described above.

DEPRECIABLE PROPERTY

All capitalized equipment costing at least $5,000 and buildings, building improvements, land improvements, and leasehold improvements costing at least $15,000 shall be depreciated according to generally accepted accounting principles applicable to governmental entities. Depreciation is a measure of the economic use of an asset over its intended life. It assesses the current value of the College's capital assets. It is based on consideration of physical use and economic, technological, or environmental obsolescence. The Business Office will maintain a useful life class schedule for computing depreciation expenses.

Depreciation will be calculated using the straight-line method and the half-year convention, which calculates six (6) months of depreciation during the year of purchase, regardless of the date of purchase.

CUSTODIAL DESIGNEE

The appropriate budget manager or designee shall maintain physical custody of all capitalized and inventoried fixed assets. The initial custodian shall be the budget manager responsible for procuring the property. Subsequent changes in custody are accomplished by preparing the D-650F – Fixed Asset Disposal/Transfer Form signed by both the former custodian and the new property custodian within 15 calendar days of the transfer. The Business Office is responsible for maintaining adequate records to determine the physical custody of all capitalized and inventoried assets at any time.