Capital Project / Asset Accounting

Capital Project / Asset Accounting

What is an asset?

An asset, as defined by the PASSHE Board of Governors, is equipment, furniture, buildings and improvements with a cost in excess of $5,000 and an estimated useful life of two years or more. All costs associated with placing an asset in service, including freight, installation costs, site preparation costs, alterations and professional fees are included in the capitalized value. Also, if university employees, such as engineers, carpenters and electricians, contribute to the completion of a capital project, the associated salaries, wages, benefits, and other costs are included in the capitalized value.

What is a capital project?

A capital project falls into one of three categories:

Building - a structure erected to stand more or less permanently (McCormick addition, Monty's).
Building Improvement - improvements or enhancements which extend the useful life of a building (Haas renovation, sprinkler systems installation).
Land Improvements - physical changes to land that increases the utility of the land (Academic Quad, artificial turf field).

Physical Inventory

An inventory of all assets is performed every two years. Each department Chair/Director is sent a listing of all assets coded to their cost center(s) and asked to verify asset details for accuracy. Also, a listing of department assets can be requested at any time by contacting Debra Newman.

Disposal or Relocation of an Asset - whenever an asset is to disposed or moved, the Asset Disposal / Relocation Form needs to be filled out and sent to Purchasing, with a copy to the Finance and Business Services Department. This is necessary to ensure accurate accounting for the asset relating to book values, any applicable gain / loss on disposal and, in the case of relocation, that the correct department is responsible for the asset on their inventory.

Donated Assets - fair market value must be obtained from donee and communicated to the Finance and Business Services Department so the asset can be correctly recorded as a donation and added into the SAP Asset System and depreciated. Also, any University expenses for transportation, installation, etc. will be included in the capitalized asset value.

Assets with a Trade-In Value - if an asset is traded-in on a new asset (such as copiers and vehicles), and the cost of the new asset is reduced by a trade-in value, that trade-in value amount must be communicated to the Finance and Business Services Department, so the gain/loss on disposal of the old asset and the value of the new asset can be properly recorded.