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Systemwide accounting procedures

Accounting Integrated Statewide Record System procedures

Capital Assets

Equipment with value of $5,000 or more and life expectancy of two or more years are considered capital assets.

Capital asset procedures are governed by Board policy and should be reviewed before these transactions are completed.

Accounting Transactions for Capital Assets

Click on one of the following links to jump to the associated accounting transaction.

1. All funds except Enterprise Funds
• Purchase Capital Assets
• Purchase Capital Assets with Trade-In
• Donated Capital Assets
• Sale of Capital Assets
• Disposal of a Capital Asset
• Transfer Between Institutions
2. Enterprise Fund
3. Reconciling Equipment System and Accounting

All funds except Enterprise Fund

Accounting transactions involving Capital Assets must be recorded in a cost center. Capital Assets additions and deletions can occur from a number of occurrences such as purchases, donations, sales, disposal, transfers, or trades. The following accounting entries are needed for each type of activity. If a PO number was entered on the EQ0111UG screen, then a PO# must be entered in the reference field of JG AC2208UG entries, otherwise the asset # must be used.

Purchase Capital Assets

New item or betterment.

Payment Voucher Transaction (PV)

DR		4000		Equipment
	CR		8110	Cash

Purchase Capital Assets with Trade-In

Payment Voucher (PV) for Full Amount of the New Asset less Trade-In Amount

DR		4000		Equipment
	CR		8110	Cash

General Journal Voucher (JG) - AC2208UG screen - for the Trade-In amount

DR		4000		Equipment
	CR		9701	Equipment Sales

Note: Enter PO number for new asset in the PO # field.

Losses on trade-ins are recorded by the Financial Reporting Section.
Gains are deferred.

Donated Capital Assets

For instance, from a foundation or private company to the institution.

General Journal Voucher (JG) - AC2208UG screen

DR		4001		Donated Equipment
	CR		9404	In-Kind Contribution

Sale of Capital Assets

General Receipt by Cost Center (CP) - AR2207UG screen

DR		8110		Cash
	CR		9701	Equipment Sales

Disposal of a Capital Asset

No accounting entry is needed. However, the asset should be disposed
of in the Equipment module.

Transfer Between Institutions

The receiving institution enters:

General Journal Voucher Transaction (JG) - AC0208UG screen

DR		4000		Equipment
	CR		9806	Intra MnSCU Transfer In

Note: Enter new asset number in the reference # field.

The transferring institution enters:

General Journal Voucher Transaction (JG) - AC0208UG screen

DR		7106		Intra MnSCU Transfer Out
	CR		4000	Equipment

Note: Enter asset number in the reference # field.

ENTERPRISE FUND

For the state's annual report, Capital Assets must be reported on the balance sheet of enterprise fund general ledgers. Therefore, you must make an annual entry to update the general ledger balance using expense object code 7999 to reduce the cost center amounts.

In addition, depreciation must be recorded in enterprise funds. Record this entry once per year. Depreciation method is straight line over useful life of asset.

The accounting entries are as follows:

• Update General Ledger Equipment Balance for Purchases

General Journal Voucher (JG) - AC2208UG screen

DR		8408		Equipment
	CR		7999	Change in Equipment Balance



• Record Depreciation

General Journal Voucher (JG) - AC2208UG screen

DR		7901		Depreciation - Equipment
	CR		8404	Accumulated Depreciation



• Update General Ledger Equipment Balance for Sales

General Journal Voucher (JG) - AC2208UG screen

DR		8404		Accumulated Depreciation
DR		7999		Change in Equipment Balance
	CR		8408	Equipment
DR	CR	9702	9702	Gain/Loss on Sale of Equipment

RECONCILING EQUIPMENT SYSTEM AND ACCOUNTING

For both the enterprise funds and other funds, the additions and deletions in accounting must agree with the detail of equipment system records. The EQ0003CP and EQ0006CP reports identify the exceptions between the accounting and equipment systems. They should be reconciled quarterly.

If you have questions or comments please email us (accounting@so.mnscu.edu) or refer to the staff directory link at the top of this page for additional contact information.

Last reviewed 5/29/07.