Policy V-Q: Policy on Fixed Assets

Purpose:

To ensure that the College’s fixed assets are acquired, safeguarded, controlled, disposed of and accounted for in accordance with appropriate accounting and regulatory requirements.

Policy Statement:

A fixed asset is defined as an item with a purchase price of $5,000 or more and a useful life of two or more years. Renovation in excess of $100,000 to buildings, infrastructure and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. The cost of normal maintenance and repairs that does not add to the value of the asset or materiality extend an asset’s life are charged as an operating expense in the year in which the expense is incurred.

Categories:

Fixed assets, which meet the appropriate cost and useful life criteria, are grouped in the following categories:

  • Buildings – a structure that is permanently attached to the land, has a roof, is partially or completely enclosed by walls, and is not intended to be transportable or moveable.
  • Land
  • Land Improvements - all improvements to land other than buildings, site preparation that ready land for its intended use, parking lots, fencing and gates, athletic fields, etc.
  • Furniture, equipment and vehicle - trucks, vans and cargo vehicles; major equipment, audiovisual equipment, copiers, kitchen equipment
  • Telecommunications and Peripherals - computer hardware and related accessories
  • Library Books - periodicals, texts, journals, books of reference and other books for use in the library

Inventory:

To ensure that all capitalized assets have been properly recorded and tracked, the District Business Office will conduct an on-going biennial inventory of all fixed assets. The fixed assets in a department will be accounted for/completed every two years, but not all departments will have a physical inventory during the same time of year.

Upon completion of an inventory, a summary of reconciliation items will be presented to the department chair/ administrator for review, comment and resolution.

Depreciation:

All depreciation and amortization calculations use the "straight line" method for all depreciable fixed assets (land and construction-in-progress are not depreciated). The expected useful life of each category of asset is:

Building 50 Years
Land Improvements 20 Years
Library Books 15 Years
Furniture, Equipment, and Vehicles 10 Years
Telecomminucations and Peripheral Equipments 5 Years

Retirement, Sale, or Disposal of Property:

The College may dispose of surplus property providing that such goods are disposed in accordance with applicable federal, state and local laws.

(Approved March 2, 2009)