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We are required by law to follow the Canadian Institute of Chartered Accountants (CICA) Handbook when preparing financial statements for the University of Regina. These rules state that we must capitalize and amortize our capital assets. POLICY The University will capitalize assets costing more than the following amounts:
These assets will be placed into categories and amortized over their estimated useful lives as described in Policy 30.70.05 – Amortization of Capital Assets. For assets where environmental law or contract requires the University spend money in the future for site restoration, a liability for this site restoration will be set up, if measurable, and the costs will be expensed in a rational and systematic manner. DEFINITIONS Capital Assets Capital Assets are items owned by the University, such as land, buildings, equipment, and software that are used over a period of time to provide service to the University and the University community. Capital Assets may be used to produce goods or to repair, maintain, or construct other assets. Assets held for resale are not capital assets. We also do not consider assets held as part of a collection to be Capital Assets (see Policy 30.70.10 – Collections). Computer Related Assets Computer related assets include all hardware components such as CPU’s, printers, monitors, scanners, or keyboards. The threshold is $500 because computer components are the University’s riskiest assets and should be tracked more carefully. Also, users of university financial statements are often keenly interested in how technologically advanced a university is, and may judge this by the value of our computer related assets. Minor upgrades to previously capitalized computers will be expensed in the year the upgrade occurs. These upgrades include ram, processors, hard drives, sound cards, ethernet cards, and other similar additions. Computer related assets do not include software, which would be subject to the $2,000 threshold. Also, training costs, consulting fees and development project expenses will always be expensed, unless they are directly related to the setting up of a new computer system. Cost The cost of most capital assets includes the purchase price and related freight, installation, taxes (net of rebates) and other direct costs of getting the asset into the condition necessary for its intended use. Neither interest nor overhead will be added to the cost to be capitalized except as described in Policy 30.70.01 – Cost of Constructed Buildings, or Policy 30.70.02 – Capital Upgrades to Buildings and Site Improvements, or in Policy 30.70.03 – Land and Site Improvements. The cost of donated capital assets will equal the appraised fair market value at the date of donation. DISCLOSURE The University will disclose the capitalized cost of its assets. The University will disclose the amount of future site restoration costs expensed in the current year. RESPONSIBILITY BANNER will begin the process of asset recording by creating a preliminary asset tag for any purchased asset. Each person acquiring a capital asset costing more than the threshold amounts will send the necessary asset information to Financial Services. This information can be sent to Financial Services using the Fixed Asset Information Submission Form. The information needed to complete the asset tag includes the barcode #, make, model, serial # and location of the asset. Financial Services also needs to know the requisition / purchase order number or the BANNER invoice number in order to update the preliminary asset tag. Each person receiving a donated asset will inform Financial Services of the donation and the appraised values. Please refer to Policy 30.55.01 – Charitable Donations to the University. Further information can be obtained by contacting the Associate Vice-President (Finance) at 585-4171. Financial Services Office personnel will create the permanent asset tag, including all the necessary asset information, and ensure the asset has been capitalized at the correct dollar amount. The Assistant Accountant for Fixed Assets will periodically balance the amount of capitalized assets in the capital asset subledger to the amount of capitalized assets recorded in the General Ledger Accounts. The Assistant Director, Financial Services will ensure
disclosure in the University’s financial statements is appropriate. |
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