St. Olaf College Fixed Asset Management Procedures
Title: Fixed Asset Management Procedures
Effective Date: 04-28-2009
Issuing Authority: Vice President and Treasurer
Contact: Martha Erickson at ericksm@stolaf.edu or 507-786-3659
Last Updated: 04-28-2009
Purpose of Procedures
To ensure that the College’s fixed assets are acquired, safeguarded, inventoried, disposed of, and accounted for properly.
Property and equipment purchased with College funds, including grants and gifts, are College property. Each department head is responsible for safeguarding all assigned assets.
Who needs to know these Procedures
These procedures apply to all St. Olaf faculty, staff or student organizations who purchase or dispose of fixed assets.
Procedures for Capitalization
The College will capitalize any fixed asset that is tangible personal property having a useful life of five years or more and an acquisition cost of $5,000 or more. Equipment meeting this definition must be pre-approved for in the budget before being purchased.
The Business Office will assign a specific accounting unit for the equipment to be coded, in order to properly track for financial reporting purposes. The equipment will be recorded in the College’s fixed asset system and depreciated over its estimated useful life.
Procedures for Disposal of Fixed Assets
When equipment needs to be disposed of, the Fixed Asset Accountant should be notified to ensure the equipment is disposed of properly and fairly. The Fixed Asset Accountant will work with the related division or department head to determine if the equipment could be used elsewhere in the College, if a buyer should be found for the equipment, if the equipment should be given away on a first-come, first-served basis to the College community, or if the equipment should be trashed. Equipment disposals should be documented on a Fixed Assets Disposal Form, which should be completed and submitted to the Fixed Asset Accountant within a week of the disposal.
Procedures for Equipment purchased with Grant funds
Equipment purchased with grant funds must follow any requirements specified in the grant contract. The Business Office will tag any equipment purchased with federal grant funds with a control number for tracking purposes and conduct physical inventories as deemed necessary.
Definitions
Fixed Asset/Capital Asset: All tangible property which cannot easily be converted into cash and which is usually held for a long period, including real estate, equipment, furniture, etc.
Depreciation: A noncash expense that reduces the value of an asset as a result of wear and tear, age, or obsolesence.
