financial rep meeting
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Financial Rep Meeting. July 13, 2011. Property Capitalization Threshold Change Michael Williams. What is the change?. Current Definition of a Capital Asset – Tangible personal property which has an acquisition value of $1,000 or more with an expected useful life of one year or more. - PowerPoint PPT PresentationTRANSCRIPT
Financial Rep MeetingJuly 13, 2011
PROPERTY CAPITALIZATION THRESHOLD CHANGE
MICHAEL WILLIAMS
What is the change?Current Definition of a Capital Asset –
Tangible personal property which has an acquisition value of $1,000 or more with an expected useful life of one year or more.
Effective July 1, 2011 the acquisition threshold increased to $5,000.
To what types of property does this apply? Includes:
◦ Tangible personal property, e.g. Furniture & equipment Artwork and historical treasures Motor vehicles and watercraft Musical instruments Software (on a per-user basis)
◦ Additions, improvements and other outlays that significantly extend the useful life of an asset
Excludes:◦ Library materials and books ($250 capitalization
threshold)◦ Buildings ($100K)◦ Internally generated intangibles, e.g. Software ($1
million)
What is the implementation plan? Purchase Orders created prior to July 1, 2011
◦ Property with a cost of $1,000-$4,999 with an asset profile attached will be corrected when the voucher is created.
◦ Property Accounting Services will monitor this process.
◦ Departmental Managers should review their ledgers and notify PAS if they discover a capitalized asset with a cost less than $5K.
Indirect Cost ◦ Sponsored project purchases of property with a cost of $1,000-
$4,999 will not incur F&A overhead charges for FY 2011-2012.
◦ All grant proposals should continue to use a $1K capitalization threshold for equipment budgets for FY12.
Budget◦ Budget Managers should take threshold change into account
when budgeting for OCO expenditures in FY12.
What is the implementation plan? (cont.) Property Management
◦ Property with a cost less than $5K received on or after July 1, 2011 will not be tagged, tracked or physically inventoried.
◦ Previously received property with an acquisition value less than $5K will be exempt from physical inventory.
◦ Departments will continue to be held accountable for property below the $5K threshold.
◦ Contact Property Accounting Services for assistance in tracking these items.
Financial Reporting◦ GL Account and Purchasing Category descriptions have been
updated to remove references to old capitalization threshold of $1,000
◦ Property capitalized prior to July 1, 2011 with a unit value under $5K will be retired and removed from inventory records in FY12.
Contacts Budget – Katie Martindale
◦ 645-7164◦ [email protected]
Property Inventory – Julie Bickford◦ 644-9757◦ [email protected]
Purchasing – Karen Gibson◦ 644-9729◦ [email protected]
Sponsored Projects – Roberta McManus◦ 645-2485◦ [email protected]
Accounting – Donna Jarriel◦ 644-9429◦ [email protected]