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1. Rowan University has a significant investment in fixed assets which are used to carry on the university’s mission and objectives. Under the direction of the President, the Senior Vice President of Finance and CFO ensures that Accounting Services maintains all records related to fixed assets.  The Senior Director of Risk Management is responsible for maintaining adequate insuGo to linkrance on all property owned by the University or for which it controls. The Accounting Services department details the proper accounting for, and control of, University owned capital assets and Government funded and furnished capital assets.
2. All employees of Rowan University are responsible for protecting the institution’s assets. It is the primary responsibility of every faculty and staff member who is involved in any financial activity on behalf of the University to be fiscally responsible and to exercise appropriate financial controls; the Department Head or Chair is responsible to make adequate procedures for the physical security in their care, this includes the proper care, maintenance, records, and safeguards to prevent damage, loss or theft of the fixed assets within their control.
3. Capital Assets
   1. Capital assets are expenditures by the University that meet the following capitalization criteria.
      1. The asset is non-expendable tangible property used in the University’s operations.
      2. The asset is not intended for investment or sale in the ordinary course of business.
      3. The asset has an estimated useful life of three years or greater.
      4. The asset cost exceeds the capitalization threshold set forth below.
   2. Capitalization Thresholds:
      Buildings                                                $100,000 and greater
      Building Improvements                         $100,000 and greater   
      Land                                                       Capitalized regardless of cost
      Land Improvements                               $100,000 and greater
      Movable and fixed equipment               $10,000 and greater**
      (**Grant purchased movable and fixed equipment $5,000 and greater)
      Software and Software Systems             $100,000 and greater
      Bulk Assets (Furniture, Computer Hardware Telephone Equipment) $50,000 and greater
   3. Capital equipment where the value of each item is over $10,000 is purchased using the Banner Account Code 7645 - Equipment and Software over $10,000, with the exception of equipment purchased with grant funds (5xxxx and 6xxxx).  If additional smaller components are required for the operation of the asset, the smaller items are included in the aggregate cost of the asset.  Additionally, services including delivering and installing the item for operation are included in the total capitalized cost. Capital assets are recorded into the Banner Finance module and individually tracked through ServiceNow.  Bulk asset purchases of similar items that have an aggregate value of $50,000 or more are captured as a fixed asset regardless of the individual price of the item.  For example, the University purchases 25 computers at $2,000 each.  The total purchase of $50,000 will be considered a fixed asset purchase.
4. Noncapital Assets
   1. Noncapital assets are items that do not meet the capitalization criteria and are expensed in the year purchased. However, if an individual item such as a component part or accessory is part of a fabricated project, it must be capitalized even if its cost falls below the capitalization threshold. 
   2. Equipment purchases for items with an individual cost less than $10,000 should be purchased using Banner Account Code 7015 Equipment under $10,000 and expensed. Software with a one-year life should be purchased using Banner Account Code 7210 Licenses.  Warranties should be purchased using Banner Account Code 7228 Contracted services.
5. Depreciation
   1. Depreciation of capital assets is dependent upon the estimated useful life of the asset.  All new additions to the Banner Finance module shall be depreciated (except land and art).  Attachment 1 represents the general asset life guidelines using the straight-line depreciation method, with a half year depreciation allocated in both the first and last years of the asset life and zero salvage value. 
   2. Construction in Progress is not depreciated.  Capital expenditures recorded as Construction in Progress are not entered into the fixed asset database until the construction or renovation is complete and asset is deemed placed into service.  A determination is made as to the proper asset category and life by Accounting Services.
   3. Fully depreciated assets remain in the Banner Finance module with their related accumulated depreciation for as long as the assets continue to be used in University operations.  Bulk assets, once fully depreciated, are reviewed for removal from the general ledger the following year after full depreciation.
6. Acquisition and Title
   1. Equipment is acquired by the University through purchase, donation, capital lease or Government funding.  The title to capital equipment vests with the University unless specifically stated otherwise in donation or award documentation. Copies of donor letters and/or grant contracts will be requested when needed to determine ownership.
7. Capital Equipment
   1. Equipment purchases to be capitalized will be recorded in the Banner Finance module. 
   2. Physical Security, Maintenance and Care – The Custodian (Department Head or Principal Investigator) is required to make adequate provisions for the physical security of equipment in their care. Areas containing capital equipment should be kept locked after business hours or when not in use.  Special precautionary measures should be taken for high value portable capital equipment.
      1. The Custodian is responsible for exercising the necessary care to maintain the condition of the capital equipment so that the longest useful life is obtained.  Written approval must be obtained from the appropriate Government agency prior to making any major repair or rehabilitation to Government furnished property. 
8. Physical Inventory
   1. Accounting Services conducts a rotating physical inventory of capital assets to:
      1. Verify the existence of equipment recorded in the Banner Finance module
      2. Verify location and condition
      3. Determine equipment disposals and ensure proper procedures were followed for disposals; including but not limited to requesting and tracking disposal forms (required for ALL disposals).
         • If an asset is deemed to be missing a police report needs to file by the custodial department prior to disposal
         • If an asset is obsolete it should be disposed of
         • All disposals must have an Equipment Disposal/Adjustment (EDA) Form completed and approved to be processed.
      4. Comply with Government inventory requirements
         

         NOTE:

          Bulk

         Bulk assets are not individually tagged and are not included in the physical inventory process and will be disposed of the fiscal year following full depreciation.

9. Financial Reporting
   1. The following reports are generated by the Accounting Services department based on the information contained in either the University’s Banner Finance or Service Now modules:
      1. Asset Listing for Equipment, Buildings, Land and Other Assets
      2. Construction in Progress
      3. Cost to Complete Capital Projects

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1. Direct Purchase: The majority of University capital equipment is acquired through direct purchase using the same procurement policies and procedures as those for any other product.
2. Donation: The Advancement Office will inform Accounting Services of any equipment gifts with an estimated fair market value that meets or exceeds the University’s capitalization thresholds.  Any donation over $5$10,000 is required to be supported by an appraisal.
3. Capital Lease: The Department of Contracting and Procurement must provide Accounting Services with copies of all lease agreements.  Accounting Services will determine if it is a capital lease if it meets at least one of the following criteria.
1. Ownership transfers to the University at the end of the lease.
2. It contains a bargain purchase option.
3. The period is at least 75% of its useful life.
4. The present value of the lease payments is at least 90% of fair market value.
4. Government Funded or Furnished Capital Equipment
1. Government Funded:  Unless otherwise specified in the sponsored award agreement, title to capital equipment purchased or fabricated with Government funds will vest with the University.  In special situations the sponsored award agreement may require that title to such capital equipment pass directly to the Government.  In these cases, the University is prohibited from capitalizing the asset and recognizing the depreciation expenses.  However, if the asset must be tracked, the asset is tagged, labelled and entered into the fixed asset inventory.
2. Government Furnished Capital Equipment: Sponsored activity may result in the University obtaining use and/or ownership of capital equipment outside the procurement process.  If title passes to the University, the items must be valued by methods similar to those described in the Donation section above.  If title does not pass to the University, the University is prohibited from capitalizing the asset and recognizing depreciation expense.  The asset will be tagged, labeled and entered into the fixed asset inventory for tracking and control purposes.  In either case, the PI is responsible for notifying the Accounting Department.  
5. Loaned Capital Equipment: Capital equipment on loan to the University from an external organization must have prior written approval of the receiving department head/chair or his/her designee.  Assets on loan to the University cannot be further loaned to an external organization or individual without the written approval of the title holder.  All equipment on loan to the University must be reported to Accounting by the PI using the Equipment Disposal / Adjustment Form.  Such assets will be entered into the fixed asset inventory for tracking and control purposes.  When capital equipment is returned, the PI must inform Accounting using the Equipment Disposal / Adjustment Form.

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To ensure adequate tracking of fixed equipment additional information is required in the requisition notes when purchasing equipment over $5$10,000 (account #7645) ($5,000 for external grants), which should indicate:

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