Accounting Procedures Handbook

CAPITAL ASSETS 11.5 ASSETS I. OVERVIEW Capital assets represent the largest group of assets on the Board of Education’s Statement of Net Position. Capital Assets include those assets with a cost of $5,000 or greater and have an estimated useful life greater than 2 years. Capital Assets include the following categories: Construction in Progress (CIP) Land and Land Improvements Buildings and Building Improvements Vehicles Furniture, Fixtures, and Equipment The Board depreciates the above assets using the straight-line method, half-year convention, over various useful lives ranging from 5-50 years. Description Estimated Lives Land Not applicable Buildings and improvements 20 – 50 years Furniture and Equipment 5 – 15 years Vehicles 8 years Random physical inventories are taken throughout the school system in conjunction with the annual audit. II. CONTROL OBJECTIVES • To ensure that capital assets are reported in accordance with generally accepted accounting principles. • To ensure that physical control is properly maintained over all assets. • To ensure that all capital asset records are updated timely and accurately. • To ensure that disposal of assets is properly carried out in compliance with applicable laws and regulations and recorded. III. PROCEDURES A. Recording Asset Additions 1. Each month, Capital Asset Accountant prints the Capital Asset Reconciliation report from the BusinessPLUS system. This report lists ALL purchases that have been coded to the G/L equipment expenditure accounts. Most of these should already be in the system. The exception is assets bought using invoice authorizations as opposed to purchase orders. 2. Reconcile all equipment purchases to the Capital Asset Database in BusinessPLUS. Determine if checks were written for supplies and miscoded to equipment in error. 3. For all assets not yet recorded in BusinessPLUS Database, post additions. B. Year End Close out of Assets 1. Receive “Capital Asset Web Form” sent from schools. These forms track assets that have been purchased with school funds. 2. Delete assets from the BusinessPLUS Database that the schools have indicated have been discarded per the Capital Asset Web Form. 3. Add any assets that the schools indicate have been added per the Capital Asset Web