Systemwide accounting procedures
Accounting Integrated Statewide Record System procedures
Capital Assets
Equipment with a value of $10,000 or more and life expectancy of two or more years are considered capital assets.
Capital assets are governed by Board Procedure 7.3.6 and should be reviewed before these transactions are completed.
Accounting Transactions for Capital Assets
All funds except Enterprise Funds
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) - 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) |
|---|
| 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) |
|---|
| 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) |
|---|
| 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, as well as book depreciation in enterprise funds. The annual entry will be provided to all institutions by the Office of the Chancellor Financial Reporting Unit, once a year, after each fiscal year end (between the months of August and November of the following fiscal year).
Example of the accounting entries follows, however make the entry only when you receive it from the OOC Financial Reporting Unit:
- Update General Ledger Equipment Balance for Purchases
General Journal Voucher (JG) DR 8408 Equipment CR 7999 Change in Equipment Balance
- Record Depreciation
General Journal Voucher (JG) DR 7901 Depreciation - Equipment CR 8404 Accumulated Depreciation
- Update General Ledger Equipment Balance for Sales
General Journal Voucher (JG) 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 EQ0025CP report identifies 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 3/4/10.
