Acquiring Capital Assets
ANY INSTRUCTIONS AND LINKS RELATING TO MYUF MARKET ARE UNDERGOING UPDATES
This directive establishes the proper methods of acquiring capital assets. Capital assets can be acquired by four different ways: the capital assets can be purchased through Procurement or Disbursements, donated to the University of Florida through the UF Foundation, transferred in with incoming faculty from another university, or loaned (“furnished”) to UF by a federal agency or other agencies.
Reason for Directive
The Board of Governors and UF directive defines which items are required to be tracked as capital assets. A capital asset is long-term property that UF owns and uses in fulfilling its mission, and it is not expected to be consumed within one year of acquisition. There are several types of capital assets: tangible property, real property, and intangible property. Capital tangible property is property that can be physically relocated, costs a minimum of $5,000 per item, and has a useful life longer than one year (excluding library resources, these items only require a minimum of $250).
The following capitalization thresholds define the criteria for capitalizing University of Florida assets:
- Furniture & Equipment – Includes moveable equipment of a non-consumable nature, where the value or cost (less discounts) of the asset including freight, installation, other costs incurred to acquire the asset is $5,000 or more, and the normal expected life of which is one year or more. Note: Repairs and maintenance expenses, service contracts, and extended warranties are not additions to the capital assets.
- Artwork – Depreciable – Includes all artwork purchased by a department (not including the Harn Museum or the University Gallery) the value or cost of which is $5,000 or more and the normal expected life of which is one year or more.
- Artwork – Non-Depreciable – Includes all artwork purchased by the Harn Museum or the University Gallery ONLY where the value or cost of which is $5,000 or more and the normal expected life of which is one year or more. Note: All donated artwork is donated through the UF Foundation and reported on the Foundation’s financial statements.
- Software – Computer Software is treated as an intangible asset. Software includes software licenses that have a unit cost of $4,000,000 or more, the life is one year or more and does not have a time-limited license for current or future use (i.e. does not require payment or return each year).
- Livestock – Includes animals with a value or cost of $5,000 or more and the normal expected life is one year or more.
- Library Resources – Includes Library resources with a value or cost of $250 or more and having a useful life of one year or more.
- Leased Furniture and Equipment – Includes leases of furniture and equipment with total annual payments of $5,000 or more per item and with a lease term longer than 12 months (including all optional extensions).
- Leased Real Estate – Includes the lease of real estate with total annual payments of $100,000 or more and with a lease term longer than 12 months (including all optional extensions).
Who must comply?
All University of Florida departments. It is the Property Custodian’s responsibility to identify and safeguard all capital assets owned by their departments. The Property Custodian will identify Departmental Contacts who will be delegated daily tasks.
When Purchasing New Capital Assets through a Purchase Requisition
Complete a Purchase Requisition using the UF HR Toolkit – Completing a Requisition in myUF Market. When purchasing capital assets, the purchase must meet the capitalization threshold ($5,000.00) for the type of capital asset being purchased
Capital assets should never be purchased unencumbered through myUF Marketplace or purchased with a PCard.
Please note: When purchasing tangible capital assets, the department is encouraged (whenever economically feasible) to purchase environmentally preferred products according to the Sustainable Procurement Directive.
- The Purchase Requisition must reference the department ID, fund, program, and account
- An assigned employee for each department will be responsible for receiving the asset
- When removing the packing slip and confirming the contents of the package, this employee will indicate the following on the packing slip:
- Serial Number
- Primary User
- The employee who received and verified the equipment will sign and date the packing slip
- The department will follow the steps in the UF HR Toolkit – Approving an Invoice for an Asset and attach the documentation of receipt (such as the signed packing slip)
Please note: Any payment created without documentation of the asset’s receipt will be returned to the department
- After the voucher is approved, Asset Management records the asset in myUFL
- Journal entries are generated from myUFL to capitalize the item
- When an asset is capitalized, the asset costs are converted to a capital asset account (180000-189999). University Departments will not use these accounts directly. Note, charges to account 787000 will be capitalized into the appropriate capital asset category at the completion of the construction project
- The department will complete a Property Update in myAssets for any additional information to be added to the property record
When Trading-in an Old Capital Asset to Reduce the Purchase of New Capital
- Complete a Purchase Requisition using the UF HR Toolkit – Completing a Requisition in myUF Market
- Indicate the old decal number of the asset that is being traded-in on the comments field
- Initiate a Disposition request in myAssets for the old piece of equipment using the Disposing of Capital Assets Directive
- Remove all University decals from the asset before the item is traded-in
- Remove sensitive information from all devices before the item is traded-in
Note: The University of Florida does not permit the trade-in of UF owned assets for expendable materials, operating leased equipment, or equipment being purchased by Direct Support Organizations where ownership of the new asset does not reside with the University of Florida.
When Purchasing Federal Surplus Property from Florida Department of Management Services in Starke, Florida
- Email Asset Management at email@example.com to obtain prior authorization
- Asset Management will authorize the department to pick-up Federal surplus property
- Certify receipt of the property items and authorize payment (when necessary) when the Federal surplus property is received
- Mail a copy of the certification of receipt or invoice to Asset Management (PO Box 115300, 116 Elmore Hall), or email to firstname.lastname@example.org
- Asset Management will add equipment to the system
Note: Capital Assets should never be purchased unencumbered through myUF Marketplace or purchased with a PCard.
When Fabricating Equipment
- Complete a Purchase Requisition using the UF HR Toolkit – Completing a Requisition in myUF Market, using the proper asset account, department, fund, program and (if applicable) project information
- If multiple requisitions are needed, include a previous PO or, if known, the asset tag number for the fabricated equipment
- Indicate in the comments field on the requisition that the costs will be added together to make one asset
- Receive the asset(s) in myAssets
When additional components are added to an existing capital asset the cost of those additional components should be added to the value of the capital asset if all of the following conditions exist:
- The additional components is fixed (permanently or not easily removed) to the capital asset.
- The cost of the additional component is more than 25% of the capital asset or $5,000 whichever is lower.
- The additional component adds additional functionality or extends the life of the capital asset.
Asset Management is here to help departments properly account for and track the cost of capital assets, please contact by email: email@example.com or phone: (352) 392-2556 with information or questions about “add value” components to capital assets. Please include in the communication the capital asset number which has a component added, and if the component is already purchased please include the PO number or voucher number.
When Purchasing Furniture and Equipment from Contract or Grant Funds
Specific provisions in each contract or grant may vary regarding the acquisition of furniture and equipment. In many cases, prior approval must be received. Before furniture and equipment are charged to a contract or grant, departments must review the terms and conditions of the agreement to identify limitations for purchasing furniture and equipment. If the department is unsure of limitations set forth by the granting agencies, they can contact Asset Management at (352) 392-2556.
- General types of furniture and equipment, such as typewriters, air conditioners, office furniture, and calculators are not permitted to be purchased unless specifically approved in writing by the Contracting Officer
- All Purchase Requisitions (partially or fully funded) must include the project number assigned to the contract and grant on the ChartField string
Known Agency Specific Limitations
- For the Department of Defense (DOD) contracts, the purchase of equipment or furniture in the project budget costing less than $5,000 does not need further approval, but prior approval of the Contracting Officer is required if the item is not listed
- NASA Grants – Acquisition of furniture or equipment costing in excess of $5,000 and not included in the approved budget requires the prior approval of the Administrative Grants Officer unless the item is merely a different model of an item shown in the approved budget. The government reserves the right to require transfer to the government or third party (named by the government) of the title of items purchased at a cost in excess of $5,000 within 120 days after receipt of a final inventory
Note: Capital Assets should never be purchased unencumbered through myUF Marketplace or purchased with a PCard.
When Leasing Equipment or Real Estate
Leases of equipment or real estate must be capitalized if the lease is longer than 12 months (including all optional extensions) and total annual payments of $5,000 or more per item for furniture and equipment or the total annual payments of $100,000 or more for real estate.
The department must provide Asset Management with:
- Lease agreement
Asset Management will add the asset to the system and instruct the department on how to properly account for leased equipment or real estate.
When an Asset is Donated
Assets can be donated to UF through the UF Foundation from other universities, the Federal Government, other State agencies and private industries, or transferred in with incoming faculty from another university.
- Receive the asset(s) in myAssets
- Obtain supporting documentation which clearly confirms that ownership has been transferred to the University of Florida
- Asset Management staff will add the asset to the Asset Management subsystem indicating the acquisition type as “donation”
- The value of the donated asset is added to the financial statements at the fair market value of the asset at the time the University of Florida acquires the asset
When an Asset is Loaned or “Furnished”
Assets can be loaned, or “furnished” to UF by a federal agency or other agencies to be used at the University. It is provided to the University, but it is not owned by the University. The title’s ownership remains with the agency.
- Principal Investigator (PI) must send a copy of the shipping documents, transfer order, and/or correspondence pertaining to the receipt of the furniture or equipment to Asset Management at firstname.lastname@example.org or mail to Asset Management (PO Box 115300, 116 Elmore Hall), when the property is provided for a project
- Title to all furniture and equipment furnished by the government for use on a project or through the Federal Excess Personal Property Program will remain with the government
- University of Florida – Plant City Campus is responsible for receiving any property from the Federal Excess Personal Property Program
- The Department Contact for Plant City must notify Asset Management with supporting documentation when Federal excess property is received
- Such assets, when acquired by NASA grants, will be maintained in accordance with NASA Grant Handbook
- Furniture or equipment furnished by the government are subject to all reporting requirements of the contract, grant or program until the project is terminated, at which time specific disposition instructions will be requested by Asset Management
Review the Capital and Attractive Livestock Directive for information on acquisitions of livestock.
Capital assets, sometimes referred to as fixed assets, are resources of the university and are included on the University’s financial statements. A capital asset is long-term property that UF owns and uses in fulfilling its mission and is not expected to be consumed within one year of acquisition. The Asset Management module of myUfl contains the official property record of Capital Assets and is the data source for financial reporting for capitalized property. The Asset Management Department is responsible for managing and maintaining these property records.
The Departmental Contact handles the day-to-day operations related to property.
Fabricated equipment includes equipment that is constructed by individuals or departments by assembling parts or basic materials purchased. The total value of all combined parts must meet the capitalization threshold for the category of equipment in which it is related.
The University President has final responsibility for all capital assets that are in possession of the University. Based on specific departments, this responsibility is delegated to the Vice Presidents, Deans, Directors or Chairpersons, or a Designee. The person to whom this responsibility is assigned becomes the “Custodian” of the assets. All Custodians must be a full-time EXEMPT employee with direct knowledge of the operations of the department.
When a requisition and purchase order have not been created. Unencumbered disbursements bypass the University’s purchasing system and should only occur where normal purchasing procedures are not available or where purchasing procedures do not provide any benefit to the transaction.
07/31/2021: reviewed content
Asset Management: (352) 392-2556
Construction Accounting: (352) 392-8251
Contracts & Grants: (352) 392-1235
Procurement: (352) 392-1331
Disbursements: (352) 392-1241