|Policy Owner:||Robin Hoagland|
|Campus Applicability:||Storrs and Regional Campuses|
|Effective Date:||August 19, 2014|
|For More Information, Contact||Robin Hoagland|
|Contact Information:||(860) 486-3780|
REASON FOR POLICY
The property and equipment of the University must be presented in conformity with Generally Accepted Accounting Principles (GAAP) in the United States of America and the Governmental Accounting Standards Board (GASB).
This policy applies to all staff of the University of Connecticut, Storrs and Regional Campuses. Fiscal staff are responsible for adhering to this policy, and the Accounting Office staff ensure adherence.
Capitalization – accumulating the costs of an asset to be expensed over the useful life of the asset.
Depreciation – the systematic allocation of the cost of an asset from the balance sheet to an expense on the income statement over the useful life of the asset.
General Ledger – part of the accounting system which contains the balance sheet and income statement accounts used for recording financial transactions.
Fiscal staff – are generally responsible in their respective areas for financial matters including but not limited to procurement, adhering to budgets, safeguarding assets, and completing transactions in the financial system.
All equipment costing $5,000 or more and having a useful life of one year or more will be capitalized and depreciated in the University’s General Ledger and presented on the University’s financial statements in accordance with GAAP and GASB. All improvements to buildings and nonstructural assets that extend the useful life of the asset will also be capitalized and depreciated in accordance with GAAP and GASB. In addition, new land, buildings and nonstructural assets will be capitalized and depreciated, if applicable, according to accounting standards within GAAP and GASB. Property and equipment are recorded in the General Ledger at cost at date of acquisition including all costs necessary to place the asset in a useable condition. Gifts are recorded at fair value at the date of donation. Renovations that are determined to materially or significantly increase the value or useful life of an asset are capitalized. Routine repairs and maintenance costs that are incurred in the normal course of business are charged to operating expenses in the year incurred.
Please see http://accountingoffice.uconn.edu/913-2/ for more information regarding capitalization.