TO: All Members of the University Community 2001:04
Asset Capitalization Minimum Value
(Effective July 1, 2001)
The University capitalizes the original cost of equipment purchases and gifts in kind in the normal course of operations as required by GAAP (Generally Accepted Accounting Principals). The original cost capitalized is depreciated over its estimated useful life.
This policy establishes the minimum value threshold for capitalization.
The University will use the Financial Records Systems (Purchasing, Accounts Payable and Financial Accounting modules) to identify the original cost of assets acquired by the University. Once an item is identified to be capitalized, an asset record will be established in the Fixed Assets System (FFX). The FFX system will record all accounting entries for capitalization, cost changes, depreciation, and disposals. The University capitalizes assets that cost $5,000.00 and greater.
PROCEDURE FOR ESTABLISHING CAPITALIZATION MINIMUM
The Associate Vice President for Finance determines a value that conforms to the Universities objectives while remaining in compliance with applicable pronouncements of FASB (Financial Assenting Standards Board) and GASB (Governmental Accounting Standards Board) and other regulatory agencies.