Capitalization of Software
FIN-ACC-160
About This Policy
- Effective Date:
- 07-01-1992
See current policy
- Date of Last Review/Update:
- 07-01-2002
- Responsible University Office:
- Office of the Treasurer
- Responsible University Administrator:
Vice President and Chief Financial Officer
- Policy Contact:
Jennifer George
Director of Auxiliary Accounting, Capital Asset Management, Non-Student Accounts Receivable, and Student Loan Administration
jmabry@iu.edu
- Policy Feedback:
- If you have comments or questions about this policy, let us know with the policy feedback form.
Policy Statement
Application software shall be capitalized as a separate asset if the acquisition value is Five Thousand Dollars ($5,000) or more and has a useful life expectancy of greater than one year.
Operating software purchased with a computer package will be capitalized as part of the initial cost of the computer.
Procedures
For software to be secured as capital, the correct object code should be utilized on the purchase order and other financial transactions. A list of the current object codes (income and expense classes) is available by contacting your Campus Chart Manager (see listing; http://www.fms.indiana.edu/fia/coaman.asp/) or the Financial Information System object code reference tables.
Definitions
Application Software: Canned programs that offer special functions, i.e. Harvard Graphics, LAN based user packages.
Computer Package: Is a purchase of the main computer central processing unit and could include a monitor, keyboard, and mouse.
History
The source to this policy is:
American Institute of Certified Public Accountants (AICPA) Guidelines for Colleges and Universities, GAAP
Please note: This is an archived version of the policy. View the current version.