Effective: 06/30/2008; Modified 05/20/2011; 02/21/2012; 06/29/12; 02/01/13; 08/29/13
A fixed (capital) asset is property, such as land, buildings, infrastructure, equipment,
and works of art and historical treasures with a cost equal to or greater than $5,000
and a useful life of two or more years. Capital assets are acquired for use in normal
operations and are not for resale. These assets may be subject to depreciation.
Capital assets categorized as buildings are valued at the purchase price or construction cost. Cost should include all charges necessary to put the building or structure in its intended state of operation (i.e. professional fees for brokers, attorneys, architects, appraisers, financial advisors, interest during the period of construction, etc.). Permanently attached fixtures to the building (i.e. heating and ventilation systems, roofs, plumbing, carpet, and electrical systems) should be included in the cost of the building. Costs associated with furniture or other equipment not affixed to the building should be removed from the capitalized value of the building and reassessed as a potential equipment asset if the amount can be separated from the total construction cost.
A building experiencing an increase in its future service potential through extraordinary
repair, replacement, renovation, or rehabilitation activity may be capitalized. Future
service potential is defined as being significant and increasing the buildings value,
adding to or increasing the quality of the original building, or increasing the useful
life of a building. Activity that restores the building to its original utility level
and does not increase its future service potential should not be capitalized, but
expensed. Determination of the increase in the future service potential of an asset
should be made on a case-by-case basis.
The following forms should be used as it pertains to a specific project:
Buildings-New Construction Buildings-Renovations Infrastructure Landscaping
When the form has been completed, send it to Dale Cox, Fixed Asset Accountant (Controller's Office). Be sure to retain a copy in your departmental files.
A list of buildings is sent out annually to the appropriate departments for verification of University ownership. Buildings disposed of or no longer owned by the University are removed from the Banner Fixed Asset Module and the financial statements in a timely manner.
For deprecation purposes, the Office of State Controller allows a range of 10-100 years for the useful life of a building. For setting the University’s useful life for buildings, the determining factors were based on historical data, current events (economy, budget, etc…), and future projection of fully depreciated assets. Potential fully depreciated buildings will be reviewed annually. The straight line method is used for depreciation and computed using the half-year convention.
Western Carolina University’s (WCU) Fixed Asset Policy provides the general guidelines for inventory and control of equipment and to assist management in carrying out their responsibilities regarding the accountability for University assets. To facilitate their responsibilities, the Controller’s Office and Division of Information Technology (IT) at WCU are jointly tracking assets of significant value and high mobility. The Controller’s Office will maintain the official inventory for IT and Non IT assets $5,000 or greater. Assets defined as IT will be tracked by the Division of IT. It is highly suggested that assets not categorized above and of significant value to their respective department(s) and highly mobile be tracked on a departmental basis.
This policy applies to equipment for which WCU has ownership or custody, including equipment donated to the University or purchased with funds from grants or contracts (unless the grant agreement or contract specifies otherwise).
Ownership and Title
Generally, the University retains ownership and title to all equipment purchased with University funds. Exceptions are equipment purchased with grant, contract, or agency funds and written agreements or contracts where ownership is retained by or reverts to the funding agency. The University remains responsible and accountable for such equipment while it is in the University's custody.
Custody and Control
The custody and control of equipment is delegated to individual departments. Each department is responsible for maintaining inventory controls and safeguarding all assets regardless of cost. The department head is required to follow the University's established policies and procedures in the acquisition, use, maintenance, and control of equipment in his or her department. (See section, Acquisition and Maintenance of Fixed Assets, for additional information).
Tracking of Equipment $5,000 or Greater
The Controller’s Office and Information Technology (IT) will jointly track University equipment. Official tracking of equipment, for financial reporting, valued $5,000 or greater will be the responsibility of the Controller’s Office. These assets will be tagged with a purple color tag. Assets defined as “IT” will be tracked by the Division of IT. It is understood that some equipment valued $5,000 or greater may be an IT asset as well and will have both the purple tag and an IT asset tag which will be green. Older assets may still have the red WCU asset tag, but this tag will no longer be used after a purple tag or a green IT asset tag has been affixed. However, the red tag is to remain on the asset for possible future references.
Definition of Equipment
To assist in determining the proper G/L account number for equipment-type expenditures and when asset records should be created and tagged, the definition of equipment is further categorized into the following:
- Capitalized Equipment
Acquisitions with a value of $5,000 or greater and a useful life of two years or more. An asset record must be created for all capitalized equipment and the item tagged by the Controller's Office with a purple tag. All expenditures for capitalized equipment must be recorded with a fixed asset G/L account number.
- Capitalized Information Technology (IT) Equipment
Acquisitions with a value of $5,000 or greater, a useful life of two years or more, and represented within the defined IT Asset list below. Items within this category will be tagged and tracked by IT with a green tag as well as the Controller's Office purple tag.
- Non-Capitalized Equipment
Acquisitions with a value less than $5,000 and a useful life of two years or more. It is highly suggested equipment not being tracked elsewhere, be tracked by the department if it is of significant value and highly mobile. (See section, "Equipment Inventory", for additional information).
- Non-Capitalized Information Technology (IT) Equipment
Acquisitions in the defined IT Asset list below. IT will track assets within this category. These assets will be tracked from purchase to disposal. When the asset is received on campus, the asset will be tagged with a green asset management tag. This asset information will be recorded and logged into the Cherwell application. The IT Division will use an application called LANDesk for discovery of assets on campus and off site locations connected to the network. Assets, classified as computers, will have a LANDesk client installed on them for further tracking purposes.
- IT Assets
- Computers - Laptop & Tablet, Desktop
- Network Printers - Not covered under PAW print
- Servers - Enterprise level, Snap
- Enterprise Level Networking - Switches, Routers, Wireless Access Points (APs)
- Smart Boards
- Data projectors installed in classrooms
- All technology assets purchased by DOIT
Fixed Asset Coordinator (FAC)
In order to comply with General Statute 143-49 and directives of the State Auditor’s Office, an annual inventory is taken to verify the existence, condition, and location of the University’s fixed assets. The University’s Fixed Asset Accountant (Controller’s Office) will provide departments a copy of its detailed inventory which is maintained on the University’s accounting system. Pursuant to WCU Policy # 75 - Removal of University Assets from Campus, the head of each academic or administrative unit is responsible for the accountability of property purchased by, for, or gifted to their administrative unit. To facilitate and assure compliance with statutory requirements and Office of the State Controller policies relative to completion and control of the annual fixed assets inventory, the head of each academic and administrative unit of the University must appoint a Fixed Asset Coordinator (FAC). The FAC will serve as the liaison between the unit and the University’s Fixed Asset Accountant (Controller’s Office) for those items recorded in the University’s Fixed Asset System and as the liaison to Information Technology for those data processing items tracked by Information Technology. The FAC will become the unit’s resident fixed assets expert. Accountability and unit head designation under Policy #75 is not altered by the designation of a FAC whose purpose is to facilitate accountability for each respective unit.
Designation of FAC
For purposes of designating a FAC, unit heads are defined as follows. For the academic areas, the Dean of each College shall be defined as the unit head for their respective college. For administrative areas, the Vice-Chancellor of each division or the Chief of Staff shall be defined as a unit head for their respective division.
For the academic areas, the Dean of each college shall appoint one (1) FAC for their respective college. For administrative areas, the Vice-Chancellor or Chief of Staff shall appoint the minimal number of FACs required to reasonably accommodate the diversity of the organizational units within their respective division. Physical proximity of units and/or high-level organizational structure should be taken into account when appointing the FAC.
The FAC may be authorized by the unit head to designate a member(s) within the departments to facilitate management of the inventory for the respective unit. The FAC will report to the unit head and work closely with the department, center, program, etc..., in the management and upkeep of accurate fixed asset processes, reports and in conducting the annual fixed asset inventory.
Additional information concerning FAC’s and a list of appointed FAC’s.
Each department is to complete their inventory within the yearly quarter assigned and return a signed copy of the completed inventory sheets to the University Fixed Asset Accountant, making any necessary changes (additions, missing, location, serial number, condition, etc.). Equipment with a remaining useful life of five years or less is to be reviewed by the appropriate departmental individual and any recommended extended useful life (in years) noted on the inventory spreadsheet. Equipment in poor condition (poor defined as not working properly and needing major repair or reconditioning), obsolete, or damaged should not be considered for extension of its useful life (unless repaired or reconditioned), but sent to Surplus. Primary responsibility for assuring completion of the annual inventory and contact between the unit and the Fixed Asset Accountant (Controller’s Office) or Information Technology shall remain with the FAC.
It is imperative that this inventory is accurate, complete, and done in a timely manner since it is used to update equipment records and to provide documentation for annual financial reporting.
Additionally, it is recommended departments have internal tracking procedures for equipment not tracked in the University’s Fixed Asset System or by IT. The FAC will take the lead for departmental level inventory and tracking of this equipment. If the department chooses to internally track equipment, a suggested Excel spreadsheet is available. The department will decide the vendor, type of tag, and budget code used for this purpose. This information is to be given to the FAC. The University’s official tracked fixed assets are indicated by existing purple ($5,000 or greater) and green (IT) tags with barcodes. To prevent any duplication or conflict of tags already in service, the FAC will contact the Fixed Asset Accountant (Controller’s Office) with the order information. The Fixed Asset Accountant (Controller’s Office) will make certain no duplication exists and, if not, place the order for the specified tags. Once the tags are received, the Fixed Asset Accountant will contact the FAC. The responsibility of controlling these tags belongs to the FAC.
If a significant change of events take place such as change in a department head, moving a department or function from one building to another, moving equipment from one location to an offsite location, or the transfer of significant assets from a third party, consideration should be made to perform interim physical inventories at the time of the change event. This is a management decision and should be based on risk factors such as likelihood of assets becoming misplaced, not transferred, or stolen. If this inventory is taken and an asset is missing, it is the responsibility of the department to notify the Fixed Asset Accountant (Controller’s Office) if the cost of the asset is $5,000 or greater; IT Asset Coordinator (position currently held by Ed Lawson) if the asset is tracked by Information Technology; and/or Campus Police if theft or suspicious nature and likely theft.
Responsibilities of the Controller's Office
The Controller's Office has the following responsibilities concerning equipment inventory:
- To maintain and control the University's inventory records establishing a secured storage site (H:Drive) for this data in case file become(s) corrupt or damaged
- To update the asset records in the accounting system for transfers submitted on the WCU Asset Inventory Control Form and assets listed on the WCU Surplus/Disposal/Cannibalization Request Form and/or Surplus Computer/IT Property Pickup Request.
- To assure each department verifies and certifies the annual inventory list.
Acquisition and Maintenance of Fixed Assets
The department head is responsible for seeing that University equipment in his or her custody and control is properly maintained and repaired so that its maximum useful life is realized. Sections A – D assist with the University's established policies and procedures in the acquisition, use, maintenance, and control of equipment.
Section A - Acquisition of Assets
Assets acquired by University funds must follow WCU’s Purchasing Policy.
Assets acquired at no cost, (i.e. gifted, donated, by assembly, furnished by the government), must be reported by completing the WCU Asset Inventory Control Form. Prior to the acceptance and receipt by university personnel of any gifted or donated asset, the potential receiving unit should contact the Office of Development to assure that Western Carolina University and Western Carolina University Foundation policies are followed. Assets built by combining parts and materials at the department level (a.k.a. fabricated assets) would be considered, “by assembly”, and the completion of this form is necessary if the asset is $5,000 or greater (excluding departmental payroll for labor and costs of parts not used in the final fabrication of the asset) and a useful life of two years or more. If the fabricated asset is IT related and has a useful life of two years or more, the IT Asset Coordinator (position currently held by Ed Lawson) should be contacted.
Asset(s) transferred to WCU from affiliated organizations (whether reimbursement is
received or not) will be the receiving department’s responsibility to complete the
WCU Asset Inventory Control Form so proper procedures are followed. The asset is to be recorded at the fair market
value of the transferring agency or organization.
Note: When completing the WCU Asset Inventory Control Form for assets with no WCU purple tag (acquisitions listed above under Section A), select the “No tag” option, mark the appropriate box, and provide detailed information of the acquired asset in the “Remarks” section on the form.
Items put together as one asset but use separate parts that are interchangeable and can be reconfigured to another form (i.e. modular work stations; cubical office installations) are not capitalized unless the cost of the separate (individual) part is $5,000 or greater.
It is understandable that the assets will be traded in due to various reasons. However, since the equipment is University property, specific guidelines must be followed as deemed by the North Carolina Department of Administration.
Asset(s) permanently transferred outside the university to another university or state agency must be approved prior to the transaction. Regina Cowan (Purchasing) must be contacted so proper procedures are followed.
For deprecation purposes, the Office of State Controller (OSC) allows a range of years for the useful life of equipment acquired by the University. In conjunction with OSC’s guidelines, other factors determining useful life were based on historical data, current events (economy, budget, etc…), and future projection of fully depreciated assets. Potential fully depreciated equipment will be reviewed annually. The straight line method is used for depreciation and computed using the half-year convention.
Section B – Use of Assets
University assets are property of Western Carolina University. Custody, control, and use of this equipment must be in accordance with University policy.
As a general rule, removal of University equipment, furnishings, and similar property from campus is not permitted. Specific exceptions may be made when all of the following conditions are met:
- Relocation is temporary
- Relocation purpose is for the conduct of university business by a University employee
- Property, while relocated, will be adequately protected from loss and damage
- Head of the administrative unit to which the property is assigned must approve the relocation
- Absence of the property, while relocated, will not hinder normal, on-campus operations
Lending of University Property for Personal or Organizational Use by Private Parties
is Expressly Prohibited.
If all criteria above is met and proper authorization given, then the Permission to Remove University Assets from Campus Form must be completed, with appropriate signatures listed, and sent to the Fixed Asset Accountant in the Controller’s Office. Please refer to the WCU Policy # 75 - Removal of University Assets from Campus.
For temporary assigned equipment (i.e. laptops, cameras, projectors - as the department head deems necessary), it is suggested that a semi-annual inventory be conducted at a specified date and time. These assets should be returned to campus for visual verification by the FAC. If any assets are IT related, information such as description, green tag number, person assigned to equipment, etc...should be forwarded to the IT Asset Coordinator (position currently held by Ed Lawson). If any assets are $5,000 or greater, the Permission to Remove University Assets from Campus Form must be completed, with appropriate signatures listed, and sent to the Fixed Asset Accountant in the Controller’s Office.
Note: Accountability of assets is the responsibility of the department head.
Section C – Maintenance of Assets
All capital equipment purchased through the university is property of the state and may not be sold, scrapped, donated, or otherwise disposed of outside of cannibalization by the department who has custody of the equipment without approval from the Purchasing Department (position currently held by Regina Cowan). Also, the WCU Surplus/Disposal/Cannibalization Request Form (Non-IT asset) must be completed and the appropriate signatures received if any of the aforementioned transactions occur. This form must be sent to firstname.lastname@example.org or faxed to ext. 7444. For IT assets, the Surplus Computer/IT Property Pickup Request must be completed. A copy of each form should be retained in the department or administrative unit. For additional surplus information, requirements on surplus, disposal, and cannibalization of assets, click on the following link Surplus Property
When equipment is permanently changed or transferred to another department, missing,
or stolen (or otherwise disposed,) the department is required to notify the Fixed
Asset Accountant (Controller's Office) by completing the WCU Asset Inventory Control Form. If an asset is listed as “Missing” on the form, the Missing Equipment Report will
be generated by the Fixed Asset Accountant (Controller’s Office) and sent to the department
head for signature. If the asset remains missing for an additional 60 days, an updated
Missing Equipment Report will be sent to the appropriate Dean and/or Vice Chancellor.
If the asset is not located, it will be removed from the Banner Fixed Asset System
within two inventory cycles. Any asset vandalized, stolen, or appears suspicious
in nature and likely a theft must be reported immediately to Campus Police. Also,
if the asset is $5,000 or greater, contact the Fixed Asset Accountant (Controller’s
Office) and if the asset is IT related, contact Division of IT at the Help Desk (227-7487).
When equipment is no longer of service to the University, it must be sent to Surplus instead of being disposed. Before equipment is sent to Surplus, the WCU Surplus/Disposal/Cannibalization Request Form (Non-IT asset) must be completed and the appropriate signatures received. This form must be sent to email@example.com or faxed to ext. 7444. For IT assets, the Surplus Computer/IT Property Pickup Request must be completed. These on-line forms are used to declare items surplus and to transfer possession to the Surplus Property Department. All items going to Surplus (tagged and untagged) are to be listed on the form when possession is transferred to the Surplus Property Department. Be sure to include the WCU tag number(s) (if applicable). From Surplus, the Surplus Property Coordinator will determine which items should be disposed. A copy of the form(s) should be retained in the department or administrative unit. Note: Disposal of any University equipment requires prior approval from the Surplus Property Coordinator (position currently held by Regina Cowan). For additional surplus information, requirements on disposal and cannibalization of assets, click on the following link Surplus Property
Any asset involved in trade-in with monies exchanged and/or different type received must
be preapproved by the State Surplus Property Officer in Raleigh. Therefore, the Surplus
Property Manager (position currently held by Regina Cowan) must be notified before
any transaction is made. Once approved, if the trade-in asset has a cost of $5,000
or greater, the department involved in the trade-in must notify the Fixed Asset Accountant
(Controller’s Office) by completing the Equipment Return Form so the asset exiting campus can be removed from the Fixed Asset System. Since the
Equipment Return Form requires the department/administrative head’s signature, the form must be completed,
printed, signed by the appropriate individual, and sent to the Fixed Asset Accountant
(Controller’s Office). A copy should be retained in the department or administrative
unit. If the asset is IT related, the IT Asset Coordinator should be notified. All
WCU tags must be removed from any trade-in asset and returned to the appropriate personnel
(purple and red – Fixed Asset Accountant, Controller’s Office; green – IT Asset Coordinator,
currently Ed Lawson). When the new/updated asset returns to campus, the Fixed Asset
Accountant and/or the IT Asset Coordinator should be notified so a new tag or tags
can be issued, affixed to the asset, and records updated.
Any asset transferred outside of the University to another university or state agency requires preapproval by the State Surplus Office. The Surplus Property Manager (position currently held by Regina Cowan) must be contacted prior to the transaction. If approval is granted and the cost of the asset is $5,000 or greater, the department involved in the transfer-out of the asset must notify the Fixed Asset Accountant (Controller's Office) by completing the Equipment Return Form so the asset exiting campus can be removed from the Fixed Asset System. Since the Equipment Return Form requires the department/administrative head's signature, the form must be completed, printed, signed by the appropriate individual, and sent to the Fixed Asset Accountant (Controller's Office). A copy should be retained in the department or administrative unit. All WCU tags must be removed from the asset exiting campus and returned to the appropriate personnel (purple and red - Fixed Asset Accountant, Controller's Office; green - IT Asset Coordinator, currently Ed Lawson).
The Equipment Return Form must be completed if an asset, $5,000 or greater and/or IT related, is returned to the vendor due to insufficient funds in the department’s budget. For information on completing this form and removal of tags, refer to previous paragraph.
Any asset purchased with federal funds (grants) cannot be sold, transferred, surplused, or disposed without consulting WCU’s Office of Contract and Grants (Nancy Wike @ ext. 2498).
Section D – Control of Assets
Control of University assets is the responsibility of the individual departments with the department head held responsible for compliance with University policies and procedures.
A Fixed Asset Inventory Verification Report is used to maintain control of University assets. This report lists the department's tagged equipment ($5,000 or greater) and is used by that department to verify their annual tagged equipment inventory. The department will receive the annual inventory list from the Fixed Asset Accountant (Controller’s Office). Each asset listed is to be visually verified, corrections/updates made (serial number, asset condition, location, etc…), signed (two signatures required – individual performing inventory and department/administrative head), dated, and returned to the Fixed Asset Accountant in a timely manner. An inventory copy should be maintained by the department. If an asset cannot be located, it is marked “Missing” and the WCU Asset Inventory Control Form completed stating the reason for missing and steps taken to recover the asset. FACs will be responsible for making sure both reports are completed and submitted.
Note: When an asset is marked “Missing”, the Missing Equipment Report will be generated
by the Fixed Asset Accountant (Controller’s Office) and sent to the department head
for signature. If the asset remains missing for an additional 60 days, an updated
Missing Equipment Report will be sent to the appropriate Dean or Vice Chancellor.
Equipment Location Codes
The University requires all asset records include the location of the equipment items. This information is necessary to prepare reports required by federal and state agencies and cost allocations for facilities and administrative cost (i.e., indirect cost) proposals. In addition, this information will assist departments in tagging equipment and conducting the required annual inventory. To accomplish this, the University has established room numbers (if available) and building location codes for all University buildings. Departments must include room number (if available) and building location codes in all asset records representing the permanent location of the equipment items. Equipment location codes can be found by clicking on the following link: Equipment Location Codes (Excel). (The Controller's Office should be contacted if a building or number is not listed on the above link). In addition, departments are responsible for informing the Controller’s Office the location codes when equipment is permanently relocated so the University’s accounting system is properly updated. This information is to be submitted to the Fixed Asset Accountant (Controller’s Office) through the WCU Asset Inventory Control Form.
Maintenance of Fixed Assets
The department head is responsible for seeing that University equipment in his or her custody and control is properly maintained and repaired so that its maximum useful life is realized.