FINANCIAL MANAGEMENT POLICY MANUAL

7000.14-R, Financial Management Regulation, Volumes 2A, 2B, 4 and
11B.
a. Responsibility for Capital Assets.
Capital assets owned or used by a NWCF activity in providing
customer goods and services must be reflected in the property and
financial records of that NWCF activity and depreciated in its
operating budget. Depreciation or amortization costs of capital assets
should encompass capital asset improvements and leasehold
improvements to property acquired under a capital lease. Capital assets
include (but are not limited to) physical plant and property (including
government owned facilities and property acquired under a capital
lease), equipment, and software.
b. Responsibility for Facility Maintenance.
NWCF activities will be the Maintenance UIC in the Naval Facilities
Assets Data Base (NFADB) for all NWCF mission related facilities,
and all facilities occupied entirely by NWCF personnel. See
paragraph 075121. The user who derives economic benefit from the
facility should reflect depreciation expenses accordingly in the
following cases: NWCF activities who are sole occupants/tenants of
government owned facilities or hold capital leases (as opposed to
operating leases) on entire buildings and sub-let portions of those
buildings; NWCF activities who are joint occupants/tenants of
government owned facilities and fall under the following two criteria
in descending order of application ---
(1) Businesses/tenants which substantiate preponderant use (via
direct labor hours, actual hours, population, square footage,
metered output, etc.) of an asset in the production of goods or
services for its customers;
(2) Activities which have an exclusive responsibility for the
maintenance, repair, upkeep, and replacement of the asset.
However, in cases where facilities are owned by a NWCF activity
but leased to a non-mission activity, the NWCF activity should not
record those depreciation expenses in its operating budget.
Facilities have to be used in support of the provision of customer
goods and services in order for depreciation expenses to be
included in customer rates.
c. Depreciation Criteria.
Capital assets will be depreciated by NWCF activities using a straightline
method. This method is based on the original acquisition cost, or
reasonable estimate thereof, including transportation, design,
installation and other related costs, less the residual value of an asset.
The depreciation schedule is as follows:
Financial Management Policy
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