Transfer-in of Capital Assets from Non-IU Institutions
|Capital Asset Management
|To provide guidelines for the capitalization of assets transferred in from other universities or government surplus (non-IU).
Whether an organization receives equipment through a transfer from another institution or from government surplus, the equipment list should be sent to Capital Asset Management at
The following additional information will be needed from the receiving organization in order to create the assets:
Generally, the acquisition value of a transfer-in should be based on the fair market value of the asset. However due to the difficulty of determining the fair market value of assets, the book value is used if the fair market value is not provided. The book value is calculated using the original acquisition date, original cost and the useful life assigned to the asset and is the difference between the original cost and the accumulated depreciation.
A transfer-in where the title of the equipment is given to IU will be assigned an acquisition type of T for transfer-in. The expense object code for this type of transfer-in will be set to 7700 for gift.
If the transfer-in assets are federal or other owned, the acquisition type will be set to "S" Capital Transfer-in Federal/Other Owned. The expense object code will be set to 7731.
On the Add Asset document, Capital Asset Management will enter the account number, object code and the appropriate value of the asset based on information supplied from the equipment list.
The accounting entries are then created based on the financial information entered into the payment section of the Add Asset document. .
Transaction entered on the Add Asset document:
Capital equipment- must have an acquisition value of at least $5,000 and a useful life expectancy of one year or more.
Equipment- includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.
Equipment list - a listing of the equipment received from the transferring institution
Fair market value (FMV) - the price that a willing buyer would pay to a willing seller, in a free market, for an asset or any piece of property.
Federally owned equipment - assets that utilize a contract and grant account for the purchase, indicating the federal government or agency will retain ownership upon the completion of the grant or contract.
Net realizable value (NRV) - a method of evaluating an asset's worth when held in inventory, in the field of accounting. NRV is part of the Generally Accepted Accounting Principles and International Financial Reporting Standards (IFRS) that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal).
Receiving organization - the Indiana University organization that received the equipment.
assets received from an external organization (usually another university) or government surplus.
CSOP 4.0 Physical Inventories
CSOP 8.0 Capitalization of Moveable Equipment
Policy FIN-ACC-150 Ownership, Depreciation and Capitalization of University Assets
|Organizations that receive capital assets that have been transferred from other universities, non-profit organizations, or government surplus.