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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 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 insurance 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 two years or greater.
      4. The asset cost exceeds the capitalization threshold set forth below.
   2. Capitalization Thresholds:
      1. Buildings                                                   Buildings                                                  $50,000 and greater
      2. Building Improvements                            $50,000 and greater   
      3. Land                                                          Capitalized Land                                                         Capitalized regardless of cost
      4. Land Improvements                                  $50Improvements                                 $50,000 and greater
      5. Movable and fixed equipment                  $5,000 and greater
      6. Software and Software Systems                $50 $50,000 and greater
      7. Bulk Assets (Furniture, Computer Hardware Telephone Equipment) $50,000 and greater
   3. Capital equipment where the value of each item is over $5,000 is purchased using the Banner Account Code 7645 - Equipment and Software over $5,000. If additional smaller components are required for the operation of the asset, the smaller items are included in the aggregate cost of the asset.  Additional, 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.  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 $5,000 should be purchased using Banner Account Code 7015 Equipment under $5,000 and expensed. Software with a one year life should be purchased using Banner Account Code 7210 Licenses.  Warranties are 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).  The following table 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.
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.
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. An equipment purchase to be capitalized will be recorded in the Banner Finance module. 
   2. Periodically, Accounting Services executes a program to capture all University invoices with a value equal to or greater than the capitalization threshold (currently set at $5,000). In order to determine whether an equipment expense captured by this program shall be capitalized in accordance with the stated policy, the invoice must be obtained and analyzed.  If the description of the item or items purchased is not clear as listed on the invoice, the purchase order referenced in the program shall be located and analyzed. 
   3. Records of all capitalized assets shall maintained by the Accounting Services office. 
   4. 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
      4. Identify obsolete assets on hand
      5. Comply with Government inventory requirements
      6. Bulk assets are not individually tagged and are not included in the physical inventory process
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

VIII.  ATTACHMENTS 

1. Attachment 1 –  Depreciation Schedule
2. Attachment 2 – Acquisition and Title
3. Attachment 3 – Physical Inventory of Capital Assets

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