SUBJECT: |
Movable Equipment – Construction in Process to Complete |
SOURCE: |
Capital Asset Management |
ORIGINAL DATE OF ISSUE: |
July 2018 |
DATE OF LAST REVISION: |
January 2022 |
CSOP NO: |
16.0 |
RATIONALE: |
To provide guidelines for the process of initiating depreciation on movable equipment. |
CSOP: |
Per accounting guidelines, depreciation can only occur on assets that are in-service (being used for their intended purpose). It is for this reason, Capital Asset Management contacts the purchasing organization for the in-service date for construction in process (CIP) assets to confirm that the assets are being used before they are moved to complete.
Assets are normally assigned the CIP asset type code “40004” during the tagging process if the equipment is not available for tagging. This could be because the location for the equipment is under construction, the equipment has not been received, or the equipment is boxed and waiting installation. There could be many reasons, but these are a few of the more common ones.
Once the tag number is assigned in KFS, this triggers an inquiry to find out if the asset is in-service.
How in-service is defined:
How you can help...
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DEFINITIONS: |
Capital Equipment- must have an acquisition value of at least $5,000 and a useful life expectancy of one year or more. Construction in Process- in regard to capital equipment, the state of not being completed, received, or in-service. Equipment- The term “equipment” includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.
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CROSS REFERENCES: |
CSOP 8.0 Capitalization of Moveable Equipment |
RESPONSIBLE ORGANIZATION: |
Organizations that purchase capital assets. |