Fixed Asset Procedures by GASB 34

To comply with the fixed asset capitalization and inventory policy adopted by the Government Board, and to ensure compliance with the GASB 34 (Government Accounting Board Statement 34) reporting requirements, all district assets must be properly tagged and entered into the fixed asset system.

The fixed asset capitalization and inventory policy is summarized below:

» Capital Assets

1. Capital assets have an estimated useful life of one year or more, and
2. The unit cost of the assets is $15,000 or more.
3. Capital assets are reported as assets and depreciated on financial statements.
4. Capital assets are charged to Capital Outlay accounts

» Non-Capital Assets

1. Non-Capitalized assets have an estimated useful life of one year or more, and
2. The unit cost of the asset is in excess of $500 and less than $15,000.
3. Non-Capitalized assets are charged to Non-Capitalized Equipment accounts.

» Cost Basis

1. Fixed assets should be accounted for at historical cost - cost at the time of original construction or purchase.
2. The cost of the assets includes all necessary charges to acquire the assets, e.g. transportation costs, site preparation costs, installation costs, and etc.
3. Donated assets should be recorded at estimated fair market value at the time of donation.
4. Unit cost is the cost of an individual unit or a group of items, e.g. an entire computer system including keyboard, monitor and CPU is a single fixed asset; a collection of books and media is a single unit when equipping new school libraries or when it is a major acquisition for expanding libraries.

» Inventories

1. All fixed assets (capitalized and non-capitalized) should be inventoried and tagged.
2. An inventory record is maintained by Purchasing Department.
3. Physical inventory should be conducted annually.
4. Addition, disposal, an change of location of fixed assets should be reported to Purchasing Department in a timely manner.
5. The following information is needed for inventory record:
a. Description
b. Manufacturer's ID or Serial No.
c. Date & Cost of acquisition
d. Budget Code
e. Location - including Site & Room Nos.
f. Tag No.
g. Disposal information
h. Method of acquisition (e.g. purchase, donation)
i. Additional information for restricted program items:
- Use and condition of items
- % of federal participation
j. Additional information for capital assets:
- Salvage value, if any
- Estimated useful life
- Function / Program that uses the asset
- Depreciation method
- Depreciation expense and accumulated depreciation

» SUMMARY

* All fixed assets should be inventoried & tagged
* Inventory record to be maintained by Purchasing Department
* Physical inventory to be conducted annually
* Change of location of Fixed Asset to be reported periodically
* All the pertinent details of the asset has to be recorded