capital asset management cats presentation january 17, 2007 today’s presenters: anna jensen,...

Capital Asset Management

CATS Presentation

January 17, 2007

Today’s Presenters:

Anna Jensen, Director of Auxiliary Accounting, Capital Asset Management, Accounts Receivable, and Student Loan Administration

Theresa Cain, CAMS Data ManagerCapital Asset Management System


Asset Creation Process for Moveable Equipment

Moveable additions are Processed in the Capital Asset Builder.

Process: Requisition issued in the Electronic

Processing and Invoicing Center (EPIC). Capital object code is assigned.

Purchase Order is approved Payment Request is issued and

approved Payment hits the General Ledger Batch process loads data into CAB


CAMS Transaction Type – Moveable Capital Equipment

New Allows systems edits – ensures object code is a

moveable equipment object code. Modify Existing

Allows systems edits – ensures object code is a moveable equipment object code

Requires asset number Fabrication

Allows systems – ensures object code is a fabrication object code.

Requires asset number Capital Lease

Allows system edits – ensures capital (principle) object code is 7099


Cams Transaction Type - Services

Services that can be capitalized:

Cost of assembling the asset Cost of installation In-transit Insurance Preparing the site and asset for its intended use Training Other Service

Freight, and Shipping and Handling charges do not have a CAMS Tran Type however they can be capitalized. Freight, and Shipping and Handing are entered as a below the line items and therefore do not require a CAMS Tran Type.


CAMS Transaction Type “New”

Select the "CAMS Tran Type" of New when you are purchasing a new capital asset. The transaction type of New will indicate to Capital Asset Management that the invoices should create new asset(s) in the university asset database. When line items will be added together to create a system asset, these line items should also be assigned the New CAMS Tran Type.


CAMS Transaction Type “Modify Existing”

The transaction type of Modify Existing is used to communicate to Capital Asset Management that the line item purchased is a component of an existing asset. An existing asset is an asset that has been previously created from another invoice, or purchase order and exists in the university asset database. The best test to determine if you need the Modify Existing is to ask (Will this line item be added to another PO, or invoice that has been posted to the general ledger?).


Business Rules for Modify Existing

When components are added to an existing asset, the asset becomes a system. A system is defined as items that work together to perform one function.

To capitalize a component the unit cost must be $1,000 or more. A component can only be added to an existing asset that was

purchased in the current fiscal year. Any component costing 5,000 or more that is part of a system purchased

in a prior fiscal year will need to be created as an asset. Use CAMS Tran Type of “New”.

Any component under $5,000 purchased for an asset in a prior year should be expensed to S&E.

When a component of a system is $5000 or more and the life of the component differs from that of the existing asset the component should be created as its own asset. Use CAMS Transaction Type of “New”.

The existing asset should be reviewed to ensure the asset category (i.e., moveable, fabrication) matches that of the purchased component to be applied.


CAMS Transaction Type “Fabrication”

The term Fabrication is used in conjunction with moveable equipment and should not be confused with building construction projects. The transaction type of Fabrication identifies payments as construction in progress. A fabrication is a moveable asset created (built) by a university organization. A Fabrication Request document generates the asset number that is required when the Fabrication CAMS Tran Type is selected. Therefore the organization must submit a Fabrication Request document prior to any purchases.


CAMS Transaction Type “Capital Lease”

A lease purchase is a contractual agreement conveying the right to use property, plant, or equipment usually for a stated period of time. A lease agreement involves at least two parties, a lessor and a lessee. The lessor agrees to allow the lessee to use the item for a specified period of time in return for periodic payments. There are two types of lease purchases available; an operating lease and a capital lease.

An operating lease includes a lessor (vendor), who collects rent, and a lessee (the university), who uses the leased equipment and pays periodic rent for such use. The lessee (the university) merely uses the equipment; there is no transfer of ownership, or any risk of benefit of ownership.

A capital lease transfers substantially all of the benefits and risk inherent in ownership to the equipment to the lessee (the university).

A Capital Lease purchase is the act of acquiring assets by making periodic payments, which generally consist of principle and interest.


EPIC CAMS Document

CAMS Transactions type of New & Capital Lease will generate an EPIC CAMS Document. The document routes to the requisition

initiator. Timing. Assets can not be created until

the EPIC CAMS Document has been completed.


EPIC CAMS Document

Why do we need the EPIC CAMS Document? Capital Asset Management needs to

know how the line items on the purchase order should be combined to create assets.

Ensures the most appropriate asset type code is selected.

Allows asset to be created with useful location information.


Task Selection


Task Individual Assets


Assets not expected to be received in current fiscal year.

The “Not expected to be received in current FY” should be checked if any of the following conditions exist:

The equipment will not be received with the current fiscal year, even if the payment is made prior to the fiscal year end.

Partial payments will be issued for the equipment (down payment) and the equipment is expected to be received after the fiscal year end.

Equipment has been received, but will not be placed in service prior to the fiscal year end.

Assembling an asset. When components are purchased to assemble an asset that will not be placed in service prior to the fiscal year end.


Task One System


Task Multiple Systems


Complex System Description

Please follow the example below when entering the “Complex System Description.” Add line item 3 to line 2 System Description: Cisco Router System Asset Type code 220 Location: Bloomington, BL008, RM 539


Trade-ins

Assigned to Trade In

On the requisition the user will have the option to select which line items will receive the trade-in allowance. Each line item will have a check box (Assigned to Trade In) where the user can specify “check” which line items the trade-in allowance should be allocated to.


Assigning the Correct Object Code for Trade-ins

The NBV of the asset given in trade may determine what object code should be used on the purchase of the new equipment.


For Example:

Asset given in trade: Toro Greenmaster asset number 377304 with a net book value of 1,425.83

New Asset PurchasedLine Qty Description Unit Cost

Assign toTrade In

1 1 Groundsmaster Mower 4,700.00 yes

Trade in allowance - 1,000Purchase Order Total 3,700.00

The Plant Fund Accountant will process a journal voucher to increase the cost of the asset by the NBV of $1,425.83. After the JV the new cost of the asset will be $5,125.83.

Using this example the object code should be assigned as Capital Equipment.


Fair Market Value

Department has option to supply CAMS with Fair Market Value


Enter trade-in allowance

Trade-in allowances are entered in EPIC as a “below the line” line item similar to freight. The amount should be entered as a negative

amount. The description field is required.


Enter asset number for asset given in trade

When an asset is given in trade click on the edit button to enter the asset number (s) involved in the trade-in.


Retire assets given in trade

Entering the asset number(s) on the requisition does not automatically retire the asset(s).

The department must issue an Asset Retirement Document to remove the asset from the university asset database.


http://www.fms.indiana.edu/cams/object_code.asp


Training Using Capital Equipment Object Codes on Requisitions

January 23 9:00 to 11:00 Register at:

https://fdrs.fms.indiana.edu/cgi-bin/training/fis_schedule.pl/ScheduleIUB


Physical Inventory

Policy I-170 Physical Inventories and Location Changes for Capital Moveable Equipment Whenever an organization changes

the location of a moveable capital asset then the location must be updated in the capital asset system within 30 days of the change.


Physical inventories are completed to secure university assets.

To verify location for compliance with OMB Circular A110

To assist organizations with effective management of capital equipment.


Inventory Process

Department scans equipment Bar-Code Error document Reconciliation Report Fiscal Officer signs Certification

Letter


Inventory Time Line

Organizations will be given a minimum of time to process their reconciliation report and to return the signed inventory certification letter prior to June 30th to their Campus Capital Asset Office.

http://www.fms.indiana.edu/cams/policies/physical_inventories.asp


http://www.fms.indiana.edu/cams/


SUBSCRIBE TO THE CAMS MAILING LIST

The CAMS Mailing list is used to communicate changes to Policy and Standard Operating Procedures.

http://www.fms.indiana.edu/cams/mail.asp


IUIE Reporting

Master Catalog -> Financial ->

Capital Asset Management System CAMS DataGroups CAMS Depreciation Reports Capital Lease Reports Construction in Progress Reports Edit Reports Inventory Control Reports Organization Reconciliation Reports Screening Reports Summary Reports

capital asset management cats presentation january 17, 2007 today’s presenters: anna jensen,...

Documents

existing asset

new capital asset

system asset

capital asset builder

asset number capital

capital object code

asset number fabrication

asset cost of installation