Policies & Procedures Manual - Elizabeth City State University

400.1.47General Fund Fixed AssetsAssets purchased with governmental funds are recorded in the General Fixed Assets AccountGroup. Depreciation of general fixed assets should not be recorded in the accounts of governmentalfunds. Library books are recorded as one asset per library. The books continue to accumulate as oneasset as of July 1 of each year. Each year the new additions and retirements will be netted out atyear end. The net amount will be added as a component to the asset entered on July 1 of theprevious year.Assets purchased with proprietary funds are recorded in their respective fund group.Proprietary Fund Fixed AssetsDepreciation of fixed assets accounted for in a proprietary fund should be recorded in the accountsof that fund. Depreciation is also recognized in those trust funds where expenses, net income,and/or capital maintenance are measured. Straight-line depreciation and units of output are theprimary methods used to record depreciation expense.Recorded Value on ECSU's BooksIn accordance with GAAP, fixed assets should be recorded at historical cost or estimated historicalcosts. If purchasing a new asset, the cost is the amount paid for the asset. If it is a donated asset, thecost is the fair market value on the date donated. (The fair market value is the estimated amount ofthe asset for which it would be exchanged between a willing buyer and seller when neither areforced into the exchange. Both parties should have knowledge of all the facts and consider it anequitable exchange.) If using "In House" resources such as labor, materials, and supplies fromFacilities Management, these costs should be included as part of the cost of the asset.Capitalized Carrying CostsThe amount capitalized includes the purchase price or cost of construction plus any other chargesincurred to place the asset in its intended location and condition for use. Examples of other chargesinclude: legal and title fees; appraisal and negotiation fees; surveying fees; other closing cost;damage payments; land-preparation costs; demolition cots; architect and accounting fees; insurancepremiums during the construction phase; transportation charges, and any costs or paymentsrequired to place the asset in its intended state of operation. If using in-house resources such aslabor, materials, and supplies from Facilities Management, include the costs of the resources as partof the cost of the asset. Capitalize the costs as if outside sources were used.