Ownership, Depreciation and Capitalization of University Assets
Associate Vice President and University Controller
Office of Financial Management Services
With the exception of federally funded capital assets, the title to or ownership of all university capital assets are vested in the Board of Trustees of Indiana University. Title to capital assets (equipment) purchased on sponsored program accounts is generally retained by Indiana University without further obligation to the sponsor. The specific terms of the sponsored award should be reviewed to determine ownership. In some cases, title may be retained by the sponsor or the title may provide for conditional title to IU. For federally purchased equipment, please refer to 2 CFR 200.313 and the terms of the specific award. Questions may be directed to the Office of Research Administration. University capital assets do not become the property of the project director or the principal investigator.
To establish ownership guidelines for University capital assets in the custody of Indiana University, to define the capitalization criteria for the capital asset categories of the university, and to convey the method of depreciation used for capital assets.
Amortization: the process of allocating the cost of intangibles as an expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Bargain Purchase Option: a provision allowing the lessee the option of purchasing the leased property for an amount, exclusive of leased payments, which is sufficiently lower than the expected fair value of the property at the date the option becomes exercisable
Capital Assets: assets have an acquisition cost that meet the capitalization threshold for its respective asset type and have a useful life expectancy of one year or more
Capitalization Threshold: dollar amount that determines the proper financial reporting of an asset; asset acquisition costs over threshold are capitalized as an asset on the balance sheet; below are expensed
Cataloged: indicates the items are listed and registered in an alphabetical file and are available for the use of others
Closing Costs: include items such as attorney fees and title updates
Depreciation: the process of allocating the cost of property, plant and equipment as an expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Equipment: includes scientific and technical equipment, delivery equipment, medical equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets
Infrastructure: include sidewalks, roads, walkway lighting, telephone and network wiring, steam pipes, maintenance tunnels and sewer systems
Intangible Assets: assets that lack physical substance, are non-financial in nature, and have a useful life greater than one year; examples include, but are not limited to, easements, water rights, timber rights, patents, copyrights, trademarks, and computer software (purchased, licensed, and internally generated)
Internally Generated Software: software developed by Indiana University staff or an entity contracted by Indiana University, or acquired from an external entity but requiring more than minimal incremental effort on the part of Indiana University to begin to achieve its expected level of service capacity
Land Improvements: expenditures for improvements to the land, other than buildings or infrastructure, that ready land for its intended use; examples include site excavations and improvements, retaining walls, parking lots, fountains, athletic fields, tennis courts, yard lighting, fencing and landscaping
Lease: a contractual agreement conveying the right to use property, plant or equipment for a stated period of time
Library Acquisitions: includes library books, films, recordings, and monographs.
Licensed Software: software that Indiana University has the right to use for a specified period of time based on an agreement with the vendor
Nonfinancial Nature: asset that is not in a monetary form similar to cash and investment securities, and it represents neither a claim or right to assets in a monetary form similar to receivables, nor a prepayment for goods or services
|Capital Asset Managementemail@example.com|
|Capital Asset Manager||Joy Maddoxfirstname.lastname@example.org|
|Associate Controller & Chief Accountant||Anna Jensenemail@example.com|
The sources of this policy are:
Office of Management and Budget (OMB) Uniform Guidance
Code of Federal Regulations Title 2 §200.313 Equipment
Financial Accounting Standard Board (FASB) Statement No. 96
Governmental Accounting Standards Board (GASB) Statement No. 8
GASB Statement No. 34
GASB Statement No. 51
GASB Statement No. 62
American Institute of Public Accountants (AICPA) Guidelines for Colleges and Universities, GAAP