Number: ADMIN 110
Effective: March 28, 2017
Department: Finance and Business
Last Revision: April 28, 2017

Purpose

To establish processes, appropriate standards, authorization requirements and internal controls to ensure that CWI’s fixed assets are acquired, safeguarded, monitored, disposed of, and accounted for in accordance with College policy, state and federal laws and generally accepted accounting principles (GAAP); and to assign roles and responsibilities for accountability.

Scope

Applies to all CWI staff, faculty, and contractors responsible for acquiring, safeguarding, and/or disposing of fixed assets for their respective departments, as well as procurement and accounting staff in the Business Office performing functions relating to fixed asset purchasing, accounting, inventory, and disposal processes

Definition

Acquisition Cost: The complete cost of acquiring an asset, to include primary purchase or construction costs plus allowable ancillary costs. For donated assets, capitalized value to be based on appraised or fair market value.

Ancillary Cost: Costs related to placing a capital asset into its intended location and condition for use, to be included in the acquisition cost of the asset such as transportation, installation, and other auxiliary expenses as detailed in Appendix A, Acquisition/Capitalization Standards.

Asset Custodian: The staff/faculty member assigned primary responsibility to use and/or safeguard an asset.

Book Value: The acquisition cost of an asset less any accumulated depreciation or amortization.

Capital Asset: Real, personal, or intangible property with an acquisition cost or value of $5,000 or more and an estimated useful life of one year or greater, that is capitalized and depreciated. A capital asset may include land, buildings, improvements to land or buildings (owned or leased), equipment, capital leases, construction in progress, library, historical, and art collections, vehicles, and qualifying intangible assets.

Capitalization: The recording of a cost as an asset (on a balance sheet account) rather than an operating expense, to be expensed gradually over the life of the asset. CWI utilizes a standardized useful life schedule as a guideline to determine the appropriate time frame for expensing the asset, and capitalization processes are managed through the Fixed Asset Module of the ERP system.

Capital Lease: A long-term lease with contractual terms transferring substantially all benefits and risks inherent in ownership of the property. For criteria and accounting procedures relating to capital leases, refer to the Business Office procedure at (I:\Controller\Procedures\Accounting\Capital Lease Accounting).

Collection: An accumulation of one or more items that represent works of art, historical treasures, library or museum items, or similar assets. These items may be capitalized as a group where the total value/cost meets the capitalization threshold (but individual items may fall below the threshold).

Construction in Progress (CIP): A capital asset reflecting the cost of construction work undertaken, but not yet completed, that will result in a capitalized asset when the project is finished (Reference: GASB.org to Governmental Accounting Standards Board (“GASB”) Statement No. 51).

Depreciation: The systematic allocation of the cost of a depreciable capitalized asset (less salvage value) over its estimated useful life. All capitalized assets will be depreciated, with the exception of inexhaustible assets that do not lose value over time. CWI uses the straight-line depreciation method to calculate depreciation.

Donation: An asset received from an individual or a non-government entity. Donations are received and acknowledged through CWI Foundation processes before being added to College inventory, and shall be recorded at the estimated fair market value at the date of acquisition. Assets received from government entities are considered a transfer and not a donation.

Fixed Asset: An asset that is tagged, tracked, and managed in accordance with CWI’s fixed asset policy. A fixed asset may include capital and non-capital (“tracked”) assets included in inventory per policy requirements.

Fixed Asset Category: An asset category code assigned to a group of similar asset types (such as equipment, vehicles, land, etc.) for the purposes of applying standards of useful life and organizing fixed asset records for reporting, inventory, and asset management purposes.

Improvement: Costs associated with the permanent improvement of owned or leased buildings, land, or other capital assets that extend the estimated useful life, increase capacity, substantially improve the quality of output, or result in a substantial reduction in the operating cost of the asset. Ordinary repair and maintenance that restores rather than enhances an existing asset (examples: re-painting a wall, replacing carpeting or a window, etc.) are excluded.

Inexhaustible Asset: Assets that do not have a limited life and maintain value over time (including land, works of art, historical treasures, and some intangible assets such as patents and water or mineral rights).

Intangible Asset: An asset that lacks physical substance, is non-financial in nature, and has an initial useful life greater than one year and a value of $200,000 or more. Examples include: patents, Internet domain names, custom computer software, water or mineral rights, easements, or capital lease agreements. (Reference: GASB Statement No. 51).

Inventory: The periodic accounting of fixed assets to verify and attest to the existence, location, and condition of each asset.

Trade-In: Assets acquired by the exchange of other assets (usually for a similar asset category such as a vehicle or piece of equipment). The value of the traded item (and associated loss or gain) shall be properly accounted for and a corresponding adjustment made to the acquisition cost for the new asset.

Useful Life: The estimated lifespan of a depreciable fixed asset, used for the calculation of depreciation over the life of the asset and also for replacement planning. The College will utilize a Useful Life Schedule as a guideline for ensuring consistency in depreciation practices for similar asset categories and types.

Policy

It is CWI’s policy that all assets owned or assigned to the College will be acquired, safeguarded, and managed in a responsible, consistent, and ethical manner, and with the appropriate level of authorization, oversight, and accountability. Appropriate internal controls will be implemented to track and protect College-owned assets, maintain complete and accurate asset records, and account for College-owned assets in accordance with GAAP. Purchasing and acquisition activities will comply with applicable CWI policy and state and federal laws; be conducted with transparency, integrity, and competitive bidding; and demonstrate an appropriate and responsible use of all public funds. The disposal of College-owned assets shall occur only with advance authorization (per Appendix B: Roles and Responsibilities for Asset Management), as directed by CWI’s Board of Trustees. CWI will use as a guideline the disposal standards set by the Idaho Board of Examiners.

Guidelines

Capitalization And Depreciation

CWI will capitalize and depreciate all tangible assets with a unit cost or acquisition value threshold of $5,000 or more and a useful life of one year or greater, and all intangible assets with a value of $200,000 or more. In addition, the following asset categories will be tagged and tracked (but not capitalized or depreciated, unless $5,000 and up), due to risk factors:

  • All vehicles that are licensed and insured for road use (excluded: educational training aids)  
  • All firearms
  • Computers and electronic equipment
  • All assets purchased with grant funds that have special terms of use or disposition requirements
  • Other exceptions, at Business Office discretion

The straight line method of depreciation will be applied for all capital assets, with the exception of those items defined as inexhaustible (such as land, collections of fine art and historical treasures, water and mineral rights).

Acquisition Methods

Assets may be acquired by the College by various methods:

  1. By purchase, in accordance with CWI procurement policy and state law.
  2. By donation or gift, in accordance with CWI Foundation policies and procedures. An independent appraisal or valuation will be required for assets with an estimated value of $5,000 or more to determine the appropriate valuation and insurance amounts; any appraisal costs incurred will be the responsibility of the department accepting the donated asset.
  3. Via transfer from another college, state or local agency, Division of Public Works, or other publicly funded organization.
  4. Via self-construction or fabrication. Self-constructed asset costs shall be tracked with a project ID number as construction-in-progress and capitalized upon completion.
  5. Via trade-in. Asset trade-ins require pre-authorization by the Vice President of Finance & Administration; Employees should consult the Fixed Asset Manager prior to committing to a trade-in.

Asset Identification, Tracking And Record Keeping Standards

In order to ensure that asset records are accurate and maintained on a consistent basis, the following standards have been established:

  • All fixed assets will be assigned a unique property ID number, tagged and tracked in the Fixed Asset Module of the system of record. Acquisition and disposal records will be entered a minimum of once per quarter; additional interim entries may be made as deemed necessary for large acquisition or disposal events.
  • Asset general ledger accounts will be reconciled, at a minimum, on a quarterly basis.
  • Asset records (paper and/or electronic) will be tracked and retained as long as CWI owns or holds possession of the asset, after which time they may be archived. Record retention and destruction practices should follow as a guideline current Idaho Records Center Retention Schedules, Appendix 9, State Board of Education-Higher Education Records . Current standards should be consulted prior to destroying any records.

Ownership

CWI owns all property purchased with College or grant funds and all property transferred or gifted to the College, except where restricted or excluded by grant terms. No department, faculty or staff may hold a proprietary interest in any tangible or intangible property of CWI, and all assets will be put to their highest use for the overall benefit of the College. No student club shall own capital assets. Theft or misappropriation of CWI property and/or private property on College premises constitutes a violation of CWI policy and Idaho law.

Asset Usage

Usage of property owned by CWI will comply with the following guidelines:

  • College-owned assets/property will be utilized only in the performance of CWI functions and may not be used for personal benefit.
  • Property may not be rented or loaned to any person or group for non-CWI uses without prior authorization from the appropriate administrator and the Vice President of Finance & Administration.
  • College buildings or grounds may not be used for the permanent or continuous storage of personal property that is not used for official purposes.
  • Property purchased with funds from grants and/or contracts may have additional restrictions on usage or disposal.
  • Usage of bond-financed property will be monitored in accordance with CWI tax-exempt bond compliance policy.

Roles And Responsibilities 

Proper asset management is critical to protecting CWI’s investment in property and equipment utilized to further its mission, and in demonstrating good stewardship of public resources. Each department is responsible for protecting, maintaining, and tracking the assets procured on its behalf and/or assigned to it, and for ensuring that purchasers and end users of CWI-owned property comply with established procedures regarding the acquisition, tracking, monitoring, and disposal of assets in a responsible and ethical manner. Below is a segregation of duties relating to fixed asset management.

Roles:

  1. Fixed Asset Manager - The Comptroller will assign responsibilities for oversight and coordination of fixed asset processes to a staff member within the Business Office. The designated Fixed Asset Manager will be responsible for the development, coordination and implementation of asset management and inventory processes and procedures, and for supporting departmental units in the discharge of their property management responsibilities. Duties will include ensuring the tagging and capitalization of all qualifying assets, coordinating inventory and quality assurance activities, maintaining current fixed asset records and reports (including acquisition, disposal, and transfer activity), posting capitalization and depreciation entries in the system of record, reconciling asset records on a quarterly and annual basis, and providing training and guidance on fixed asset policies and procedures. Capitalization and depreciation will occur on at least a quarterly basis, with interim activity as warranted at the discretion of the Fixed Asset Manager and/or Accounting Manager.
  2. Department/Unit - Each department is responsible for safeguarding, maintaining, and monitoring property assigned to, used by, or under its control. At its discretion, a department may assign one or more fixed asset coordinators to work with the Fixed Asset Manager on acquisition, disposal, and inventory-related activities. Further, each department head is responsible for ensuring that a physical inventory of all tagged and tracked assets is conducted a minimum of once per fiscal year, and attesting to the findings. When a change in administrators occurs, the new administrator assumes responsibility for all property assigned to his/her department and should promptly verify the accuracy of the assigned property and report any discrepancies. If a department receives or acquires a fixed asset by means other than a capital outlay expenditure, the department will notify the Fixed Asset Manager within 15 business days of receipt.
  3. CWI staff and asset end users - Each CWI employee, faculty member, and contractor has a general obligation to safeguard and make appropriate use of property owned by or assigned to the College (such as a grant-funded item that will be returned to the grantor at the end of the grant period). This includes property either assigned for individual use or as part of a common area. This obligation includes but is not limited to:
    1. Notifying the Fixed Asset Manager of the acquisition of assets through non-procurement methods (such as donations), disposal, or a change in status or location of fixed assets within 15 business days;
    2. Exercising reasonable care in the use of assets to prevent damage and maintain good condition, and accounting for reasonable wear and tear resulting from proper use;
    3. Reporting instances of loss, damage, or abuse of CWI-owned property within 24 hours of detection.

Inventory

All fixed assets will be accounted for at least once per year through a physical inventory to verify asset existence, location, and condition. Where appropriate, tracking for assets with a high value or theft risk may be done on a more frequent or perpetual basis through additional internal controls to protect the College’s investment.

Inventory activities will be planned and coordinated by the Fixed Asset Manager. Each departmental unit with assigned assets is responsible for completing the fixed asset inventory within the assigned time frame and submitting required reports and other documentation requested to update and maintain accurate asset records. Inventory records will be monitored and randomly verified through a quality assurance verification process, at the discretion of the Fixed Asset Manager.

Disposal

Disposal of College-owned assets may occur only after authorization by designated departmental and executive authorities, and will comply with the philosophy and policy established by the Board of Trustees, and guidelines set forth by the Idaho Board of Examiners (reference: State Board of Examiners Policy No. 442-40 and Appendix C, Disposal Guidelines) and within applicable state and federal laws. Wherever possible, assets should be transferred (via sale or donation) or repurposed within the College or donated to a state or local public school or other publicly-funded organization to maximize taxpayer-funded resources. Surplus, redundant, or obsolete assets should be disposed of according to the guidelines and per a pre-approved disposal plan as detailed on the Property Disposal Pre-Authorization form.

Any sale to the public will follow the protocols outlined in State Board of Examiners Policy No. 442-40, and will follow prescribed advertising and competitive bidding requirements. The sale or donation of CWI property through any means to CWI staff, faculty, or their family members is strictly prohibited to avoid the perception or incidence of impropriety.

Form Name Purpose
Department Property Transfer To transfer a tagged asset between departments, programs, or asset custodians.
Property Disposal Pre-Authorization

Submitted before a disposal to propose a disposal plan and to document authorization before proceeding with the disposal.

Required for :

  • All tagged and inventoried assets.
  • Any assets proposed for sale (regardless of value).
  • Any asset (or grouping of assets) proposed for sale to the public or donation to a public entity or non-profit organization.
  • Computers and electronic equipment.
  • Vehicles.
  • Any equipment or grouping of personal property or supplies with a value of $2,000 and up.
Property Disposal Submitted after a disposal to document details of the disposal and request archiving of the asset record. This form will prompt deactivation and archiving of the asset record.
Property Lost or Stolen Form to report a lost, stolen or missing asset
Property Sale To document cash proceeds and details of an asset sale, including cash receipt amount and disposition, purchaser and transaction dates/details.
Property Trade-In To document actual details of the trade-in, including a gain or loss on the asset being traded in and to adjust the value of the new asset.

 

Appendix A: Acquisition/Capitalization Standards

Note: The examples below should be considered a guideline, and may not cover variables for every acquisition. Items not explicitly listed below will be evaluated on a case-by-case basis. The Comptroller has the ultimate authority in capitalization decisions.

Asset category Capitalized Costs (Primary and Ancillary) Expensed Costs (Not Capitalized) Comments

Land

8110 Expense

1810 Asset

  • Purchase price (or appraised value)
  • Title fees and standard closing costs
  • Professional services (appraisal, legal, surveying, engineering, architect)
  • Easements, water/mineral rights (if included in land purchase)
  • Site preparation; demolition of unwanted structures
  • Prepaid operating expenses such as utilities, taxes, assessments
Capitalized but not depreciated

Land Improvements

8115 Expense

1815 Asset

  • Excavation, utility work
  • Landscaping, irrigation, water features
  • Parking lots and sidewalks (site prep, paving)
  • Ordinary repair and maintenance to irrigation, landscaping, concrete flatwork
 

Buildings

8120 Expense

1820 Asset

  • Purchase price (or appraised value)
  • Title fees and standard closing costs
  • Professional services associated with project construction (appraisal, legal, surveying, engineering, architect)
  • Building costs, including labor; initial cost of materials and fixtures; temporary utility, interest, and rental costs; other related construction costs
  • Built-in/attached furniture integral to the building’s design
  • Prepaid operating expenses (such as utilities, taxes, assessments)
  • Furniture and fixtures that are not attached (under $5,000)
  • If donated, the appraised value will be used
  • Tracked in construction in progress (CIP) during construction (except DPW)
  • Capitalized upon substantial completion and acceptance or transfer from DPW
  • May be capitalized in phases where appropriate

Building Improvements

8122 Expense

1822 Asset

  • Repairs and improvements that extend the estimated useful life, increase capacity, result in substantial improvements in quality of output or reductions in ongoing operating costs
  • Professional services associated with project construction (appraisal, legal, surveying, engineering, architect)
  • Enhancement to building infrastructure (such as HVAC, refrigeration, electrical systems) if they increase future benefits from an existing capital asset beyond its previously assessed standard of performance (useful life, capacity, performance, efficiency, quality)
  • Construction period interest, insurance, rentals, and other temporary course of construction costs
  • Project management and construction costs
  • Built-in furniture and features (permanently attached or integral to design of the building)
  • Repairs that restore functionality or existing asset value but do not enhance it or extend the useful life
  • Furniture and fixtures that are not attached (under $5,000)
  • Replacement of worn floor coverings, fixtures, or infrastructure that do not add new value
  • Roof or window repair or replacement (unless an upgrade)
  • CWI-owned buildings only
  • Tracked in construction in progress (CIP) during construction (except DPW)
  • Capitalized upon substantial completion and acceptance or transfer from DPW
  • May be capitalized in phases where appropriate

Leasehold Improvements

8125 Expense

1825 Asset

  • Similar to Building Improvements, but for value added to leased buildings
  • Maintenance and repair costs
  • Annual fees or other expenses, as specified by the lease agreement
For leased buildings only

Equipment and machinery

8130 Expense

1830 Asset

  • Shipping/delivery
  • Installation costs required to establish initial functionality of the equipment/machinery
  • Taxes (out of state, if applicable)
  • Software (if proprietary and integral to operation of the equipment)
  • Training and travel (if itemized separately on purchase documents)
  • Extended warranties
  • Upgrades to proprietary software (expense to software)
 

Library Collection

8140 Expense

1840 Asset

  • Cost of books and related resource materials
  • Shipping/delivery costs
  • Repairs
  • Book supplies
  • Electronic books and subscriptions
Capitalized collectively at end of fiscal year (1 new asset per year)

Computer equipment

8155 Expense

1855 Asset

  • Shipping/delivery
  • Installation costs
  • Taxes (out of state, if applicable)
  • Training and related travel (where separately itemized separately)
  • Extended service/maintenance agreements
 

Vehicles

8160 Expense

1860 Asset

  • Vehicle and/or trailer purchase price, less any discounts and rebates (and adjusted for any trade-ins)
  • Accessories and upgrades installed and paid for with the initial purchase (such as a bed cover for a pick-up)
  • Major repairs of $5,000 or more that increases value and/or extends useful life (engine, transmission, drive train)
  • Document fees
  • Licensing fees
  • Accessories purchased after the initial purchase that do not meet the capitalization threshold individually
  • Trailer to be tagged separately unless permanently attached

Intangible Assets

8165 Expense

1865 Asset

  • Self-developed (direct and indirect costs associated with actual development) or off-the-shelf software that meets the capitalization threshold, including software licenses (reference GASB 51, Paragraph 65)
  • Websites
  • Patents, trademarks
  • Easements, property rights (timber, water, mineral)
  • Planning phase (self-developed software or website)
  • Data transition costs
  • Excludes any property rights included in the land purchase
  • Excludes any subscription-based software where CWI owns the data but not the software
$200,000 capitalization threshold (aligns with State of Idaho policy)