Capital Assets/Property Control
- Property Acquisition
Capital equipment is defined as:
- equipment having a useful life of more than one year and a cost of $10,000 or more.
- cost includes the purchase price, shipping, installation, training and some warranty costs.
- it does not include repairs, maintenance, extended warranties, annual subscriptions and software renewals.
Capital equipment may be acquired through purchase, donation, trade-in or construction. Regardless of the way the equipment is acquired, if it meets the definition of capital equipment, it must be added to the property records and tagged with a University of Northern Colorado property tag.
Property tags are to be placed on the front of the equipment in a conspicuous place, so that they can be easily read during the annual inventory process.
Title to the property rests with the University, not the Organization, regardless of whether the equipment may have been donated or purchased from Organization budget allocations or from special appropriations or allocations. Organizations are assigned property for custody through the property tagging process and are responsible for such property. Organizations are responsible for completing transfer forms when equipment is moved or otherwise disposed of, in order to transfer that responsibility.
All items will be carried on the accounting records at cost or purchase price. This will include shipping, installation and training costs. Where the actual purchase price cannot be established, as in the case of a gift, fair market value may be used.
Equipment can be acquired utilizing the trade-in value of a similar asset. Purchase of items where the purchase price is reduced by the value of a similar asset traded in will be recorded on the property records at the actual list/invoice price of the item purchased. The cost, therefore, for the new piece of equipment will equal the cash paid for the equipment plus the trade-in allowance documented by the seller. A gain or loss on disposal of the asset traded in will be calculated as the difference between the book value of the asset traded in and the trade-in value provided by the seller.
Equipment can be acquired through a lease purchase. The principal amount of the item is the capitalized value adjusted for any trade-in value provided by the seller on equipment traded in upon purchase and calculated as noted above.
Reconditioned items will be recorded at the total purchase price plus all reconditioning costs. Reconditioning of already owned items normally will be charged to expense, and the initial property records will remain unchanged, unless the amount is $10,000 or more and reconditioning will prolong the life of the asset more than an additional year. In this case, the reconditioning will be considered an improvement, and a separate property record will be kept for the improvement.
Property Control will initiate equipment tags in one of several ways. All purchase orders will be reviewed. When a purchase order meets the capital equipment requirements, Property Control will prepare a property record and create a property tag after the purchase order has been paid. The property record will contain the following information:
- Description of equipment
- "In-service" date or purchase date
- Original cost
- Depreciable life
- Serial number of equipment
- Vendor or manufacturer
- Building and room number where equipment is located
- Source of funds used for the purchase
- Responsible Organization
- Purchase order, voucher or EIO used to pay for equipment
- Asset type
The property tag and a tag notice will be sent to the individual who requested the purchase order. That individual is responsible for attaching the property tag.
- Purchasing Asset
When purchasing an Asset that will be capitalized, remember:
- All purchases over $10,000 require a Purchase Order.
- Use a "79xxx" account code even if there is not budget in a "79xxx" line. The expense needs to be recorded in that account group for financial reporting purposes.
- If an initial purchase was under $10,000 but the final invoice is over the threshold and is an Asset, notify the property accountant and submit a journal entry correcting the expense account.
The UNC Foundation handles all donations received which allows the donor to receive tax benefits along with donor recognition. Below is the information required when accepting donations:
- Donor information (used to complete Gift-In-Kind form)
- Completed Gift-In-Kind Acceptance Form. Should be completed by the person at UNC that is accepting the donation after approval has been received from the Dean or department head.
- If the gift is greater than $10,000, we require an appraisal obtained by the donors and the donor must complete IRS Form 8283 Noncash Charitable Contributions. This form must also be signed by the Foundation.
- Property Movement
The movement of equipment on campus is sometimes necessary due to relocation of offices, equipment no longer needed, the trade in or sale of equipment to other Organizations, and due to loss or other reasons. Whenever equipment is to be moved from one location to another, it is necessary to notify Property Control so that property records may be updated.
A series of forms are included to make this reporting easier. The sections below will assist in determining which form should be used for different types of equipment movement. Forms are to be completed for movement of property that has a cost or market value of $10,000 or more.
Please complete the appropriate form and forward to General Accounting, CB 44 so the equipment adjustment may be made.
- Property movement on campus
When equipment having an original value of $10,000 or more is being moved from one building to another, one organization to another, or the temporary storage of an item, the Capital Equipment Transfer form must be completed and submitted to General Accounting.
- Property movement off campus
When equipment with an original value of $10,000 or more is moved off campus, the Off Campus Equipment form must be completed and submitted to General Accounting. Individuals that are taking equipment off campus assume the risk of loss, and may be held liable for the replacement cost of the equipment if it is lost, stolen or damaged. Their signature on this form is acceptance of the risk and the responsibility for the safekeeping of the equipment.
- Lost, stolen or missing
Missing equipment must be reported to the UNC Police Department and the Lost, Stolen or Missing Equipment form completed for the General Accounting office.
- Surplus Property
Any equipment or supplies no longer having any use to University Organizations (Departments) are considered surplus property. Surplus property can be disposed of using three methods:
- The first and preferred method is to contact Facilities Services and schedule pick-up of the surplus property.
Contact Facilities Services at 351-2446 and schedule pick-up of surplus property. If equipment with a University property tag is sent to facilities, the department/organization will complete a surplus property form and submit it to property control so that property records can be updated. Facilities Services will determine the best method to dispose of the surplus property. Any proceeds generated from the disposal of surplus property will be retailed by Facilities Services to offset the cost of surplus property disposal. If the property is usable, it will be made available to other departments/organizations on campus. Surplus property can be viewed at the Parsons Hall Service Center on Wednesdays from 10:00 am to 11:30 am.
- The second method is used when purchasing new equipment and the old equipment is used as a trade-in.
Equipment traded in on the purchase of new equipment is reported to property control on an equipment trade-in form. The completed form is submitted to property control so that property control records can be updated. Pick-up of the old equipment is determined by an agreement between the vendor and the department/organization.
- The third method would be the donation of usable equipment and supplies to a non-profit agency.
Surplus property can be donated only to non-profit agencies. A completed surplus equipment form or donated supplies/equipment form is submitted to property control. Special care should be taken when donating athletic equipment or supplies. Check with Athletics before making any athletic equipment or supplies donations to ensure compliance with NCAA rules and regulations. Donation to a non-profit agency will require a signature from the non-profit agency representative accepting the donation. Signatures are collected on the surplus/donation forms submitted to property control.
- Property movement on campus