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 Manager Capital Asset Management System

Capital Asset Management 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

Capital Asset Management 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

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management 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?).

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management Task Selection

Capital Asset Management Task Individual Assets

Capital Asset Management 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.

Capital Asset Management Task One System

Capital Asset Management Task Multiple Systems

Capital Asset Management 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

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management For Example: Asset given in trade: Toro Greenmaster asset number with a net book value of 1, New Asset Purchased Line QtyDescription Unit Cost Assign to Trade In 11Groundsmaster Mower4,700.00yes Trade in allowance- 1,000 Purchase Order Total3, The Plant Fund Accountant will process a journal voucher to increase the cost of the asset by the NBV of $1, After the JV the new cost of the asset will be $5, Using this example the object code should be assigned as Capital Equipment.

Capital Asset Management Fair Market Value Department has option to supply CAMS with Fair Market Value

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management

Capital Asset Management Training Using Capital Equipment Object Codes on Requisitions Using Capital Equipment Object Codes on Requisitions January 23 9:00 to 11:00 Register at: bin/training/fis_schedule.pl/ScheduleIU B bin/training/fis_schedule.pl/ScheduleIU B

Capital Asset Management 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.

Capital Asset Management 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.

Capital Asset Management Inventory Process Department scans equipment Bar-Code Error document Reconciliation Report Fiscal Officer signs Certification Letter

Capital Asset Management 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. es/physical_inventories.asp es/physical_inventories.asp

Capital Asset Management

Capital Asset Management SUBSCRIBE TO THE CAMS MAILING LIST The CAMS Mailing list is used to communicate changes to Policy and Standard Operating Procedures. asp asp

Capital Asset Management 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