Process Group/Policy Details
Subject: Asset Management
Process Group: Asset Management
Title of Policy: AM Construction in Progress (CIP)
Effective Date: 06/2014
Approved/Revision Date: 06/2014
Approved by:
Process Group Definitions
Fixed Asset (aka Capital Assets): Fixed or Capital Assets are assets that have a useful life greater than one year, are held primarily for use in an agency’s operations and programs, and meet cost thresholds established.
Acquisition: The acquisition of a fixed asset is the addition of a fixed asset.
Responsibility Center: The Fund that the assets’ accounting is recorded in. Fund where Depreciation is recorded in.
Shell Document: Document in CORE that is used to enter all the fixed asset details on.
Policy Statement:
Departments shall use the Construction in Process (CIP) component within Asset Management for new projects starting July 1, 2014. This will require use of Program Code within the Cost Accounting Module; it will track expenditures throughout the process automatically as the asset is being created.
Projects that started prior to CORE “go-live” will be recorded in CORE manually, recording CIP and recording the final fixed asset. Departments will crosswalk their current capital construction COFRS appropriation to a CORE appropriation unit as follows:
COFRS appropriation “ABC” will be XXXXXABC0 where XXXXX is equal to appropriation type and ) is fixed. This will allow a trail for Reporting and Analysis.
Procedures:
AM.PO.01 - Recording a Fixed Asset
There are several ways by which a Fixed Asset can be acquired, Purchased, Donation, Purchased with a Purchase Card, etc.
Departments shall use the Fixed Asset acquisition (FA) Transaction to enter a newly acquired fixed asset into the system. The FA Transaction contains both accounting and descriptive information. The FA transaction establishes the detailed record of the asset in the CORE system.
There are two ways to complete an FA transaction, first the Automated Shell Generation.
AM.PR.01.1 - Recording a Fixed Asset with Automated Shell Generation
Commodity Codes will be used state-wide when purchases are made by the purchasing departments.
If the cost of the asset purchased is greater than the established thresholds and has a useful life greater than one year, department shall purchased the fixed asset by using a fixed asset commodity code (COMMFA Table).
Departments shall process a payment and a single FA Shell Document will be generated.
If a department purchases a group of fixed assets, the department will have to copy forward the approved FA Shell Document to set up the other fixed assets purchased.
Always enter In-Service Date, Straight-Line Depreciation, & Responsibility Center
AM.PR.01.2 - Recording a Fixed Asset Manually
The other method of recording a Fixed Asset is to manually record an FA document
Donation of an Asset
Assets acquired by the use of a Purchase Card or purchased from Correctional Industries
An asset did not meet the dollar threshold at the time of purchase but ancillary costs result in an asset that is greater than the threshold
Memo Asset – an asset that falls below the threshold amount but Departments choose to track, i.e. Computers.
Always enter In-Service Date, Straight-Line Depreciation, Responsibility
Asset Number / Asset ID
Assets must be entered with a prefix identifying the Cabinet and Department.
The use of Cabinet/Department will ensure that fixed asset numbers are unique.
The Departments have the option after the prefix to allow the system to auto-generate an asset or manually enter an asset number based on a tag they may already have.
If the asset has a serial number it should be entered in the serial number field.
Special numbers will be used for fixed assets that are converted to CORE in order to distinguish converted assets to aid in the reconciliation process.
Differentiating between the group acquiring the asset and the group responsible for the asset
Asset purchased by one fund but another fund has responsibility of the asset.
This is the case of assets in Governmental funds. CORE manages this through the Responsibility Center. Configured as a required field in CORE.
Governmental Funds – Responsibility Center is the General Full Accrual Accounting Group (GFAAG), Fund 4710. It is responsible for the asset, while the accounting lines will still reflect the fund that originally funded the asset.
For Proprietary Funds the Responsibility Center is the same fund that purchased the asset.
AM.PR.01.3 – Ancillary Costs
When the cost of an asset is below the threshold, an automated FA shell will not generate.
If ancillary costs are identified and were paid using a different PO and PRC it can increase the total cost of the asset to greater than the threshold.
Prepare a manual FA Document.
In the scenario that the original asset was above the threshold and automatically generated an FA shell document, then additional costs are identified, and an FI Transaction is used to record the ancillary costs.