Section 3000: Fiscal Management
Fixed Asset Management
Administrative Regulation: AR-3180-B
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President’s Cabinet (PC) Approval: 9/12/84
Revised: 8/11/98
9/22/09 |
Property of substantial value owned by the College will be recorded and periodically inventoried by the vice president of administrative services or designee. This inventory record will be verified annually by a physical inventory taken by each department. The inventory record will be maintained by the vice president of administrative services or designee. The permanent inventory record will be substantiated by an annual internal inventory audit or by periodic inventory by an independent contractor, or as required by external funding agencies.
Defining Fixed Assets
Fixed Assets are long-lived tangible and intangible items that provide a benefit for a number of future periods.
Proper accounting for fixed assets requires the capitalization of appropriate expenditures for each of the following asset categories:
| Land - |
Non-expendable, real property, for which title is held by the District. |
| Land Improvements - |
Permanent attachments, other than buildings, which add value to land. |
| Buildings and building improvements - |
All real estate, other than land and land improvements, used for shelter, dwelling and other similar purposes. |
| Equipment/Furniture/Vehicles - |
Tangible personal property that is: a) complete in itself; b) does not lose identity or becomes a component of the building where it resides; c) of a durable nature with an expected service life exceeding a single year. A computer hardware upgrade that extends the life or adds to the functionality of the computer system will be capitalized. Repair and maintenance costs will be accounted for as expenditures. |
| Library Reserve Collections and Rental Textbooks Collections - |
Exhaustible items used for reference or lending such as books, periodicals that have a useful life greater than one year. |
| Intangible Assets - |
An intangible asset is an asset that a) lacks physical substance; b) is non-financial in nature, meaning it is not in monetary form and does not represent a claim or right to assets or a prepayment; c) has an initial useful life of more than one year. Intangible assets include computer software costs and labor cost related to modifying computer system software for college use. |
| Construction-in-Progress - |
Costs incurred for uncompleted projects for construction of buildings and improvements. |
| Infrastructure - |
Long-lived capital assets that normally can be preserved for a significantly greater number of years than most capital assets and that normally are stationary in nature. |
Capitalizing Fixed Assets
The District will use two criteria to in each asset category to determine whether an individual fixed asset will be capitalized. If an individual asset meets both criteria, the individual fixed asset will be capitalized:
| Asset Category: |
Cost or estimated historical cost: |
Estimated useful life at least: |
| Land |
$50,000 |
Not applicable |
| Land Improvements |
$50,000 |
10 years |
| Buildings and building improvements |
$50,000 |
10 years |
| Equipment/Furniture/Vehicles |
$5,000 |
1 years |
| Library Reserve Collections and Rental Textbooks Collections |
$5,000 |
1 years |
| Intangible Assets |
$5,000 |
1 years |
| Construction-in-Progress |
|
|
| Infrastructure |
$50,000 |
25 years |
Depreciating Fixed Assets
Depreciation expense will be calculated using the straight-line method, following the half-year convention, based upon the estimated useful life of the fixed asset. The estimated useful lives for the asset categories are:
| Asset Category: |
Estimated useful life |
| Land |
Not applicable |
| Land Improvements |
10-25 years |
| Buildings and building improvements |
45-60 years |
| Equipment/Furniture/Vehicles |
5-20 years |
| Library Reserve Collections and Rental Textbooks Collections |
1-20 years |
| Construction-in-Progress |
Not applicable |
| Infrastructure |
25-100 years |
Amortizing Intangible Assets
Amortization expense will be calculated using the straight-line method, following the half-year convention, based upon the estimated useful life of the asset. The estimated useful life of an intangible asset arises from contractual or legal rights must not exceed the legal term of the rights.