Asset Management

The asset management process, which is jointly administered by Inventory and Accounting, is in place to insure that UNL complies with government regulations regarding capitalization of equipment, land improvements, buildings, etc. This process involves specific coding of each asset so it can be capitalized and depreciated over its useful life. The information below will assist departments with identification and coding of assets. For additional questions, please email Liwei He in Accounting or Tony Lloyd in Inventory.

What is considered an asset?

An asset is defined as long-term, tangible, property owned by the University that cannot be easily converted to cash and will be held for a long period. For most departments, this translates to moveable equipment. The University of Nebraska capitalization policy states that all moveable equipment purchased with a unit cost of $5,000 or more that has a useful life of more than one year is an asset and must be tagged/capitalized. Buildings, land and land improvements are also assets that are capitalized but not tagged. For more information on assets, see the University of Nebraska capitalization policy. Click here for information on fabricated equipment.

Choosing the Correct G/L for Your Equipment Purchase/Lease

The single most important thing a department can do to make the asset management process run smoothly is to use the correct G/L when purchasing equipment. Use this decision tool to assign the correct G/L.

If the single item unit price of the item is <$5,000*	Use G/L from the non-capital listing
If the single item unit price of the item is ≥$5,000**	Use G/L from the capital listing
Capital Lease*** - If the lease payments plus purchase price for a single item is <$5,000	Use G/L from the non-capital listing
Capital Lease*** - If the lease payments plus purchase price for a single item is ≥$5,000	Use G/L from the capital listing (use one with Lease/Purchase in the description)
Operating Lease****	Use G/L within the 524XXX series
For upgrades ≥$5,000 to existing tagged/capitalized assets	Use G/L from the capital listing
For repair of existing tagged/capitalized assets	Use appropriate repair/maintenance G/L (525xxx)
For purchase of replacement or spare parts/components for existing tagged/capitalized assets	Use G/L from the non-capital listing
For components of fabricated equipment	Use G/L 553820.

* If a purchase includes a trade-in, determine the G/L based on the original list price rather than the net purchase price after the trade-in allowance (e.g., if purchase price was only $4,000 after trade-in allowance but list price is ≥$5,000) use G/L from the capital listing.

** Not all associated costs on capitalized equipment are included in the capitalized value. Costs related to the purchase of capitalized equipment should be itemized separately on the purchase order and the corresponding G/L should be coded as follows:

Capitalized costs include - the actual cost of the asset, software*****, shipping/freight, installation/labor (both internal and external charges) and insurance. Use these capital G/L's.
Non-capitalized costs include - software licenses and user fees, warranty/maintenance agreements, consumable items (toner, syringes, etc.), supplies, training and travel expenses for training/installation. Use these non-capital G/L's.

*** Capital Lease - title/ownership transfers to the University at the end of the lease.

**** Operating Lease - ownership is NOT transferred to the University and equipment is returned to the vendor at the end of the lease. Payments are for temporary use of equipment and therefore the equipment will not be tagged regardless of the amount of the total lease payments.

*****Regardless of the cost, software that is proprietary in nature and is necessary for a capital equipment purchase to be functional should be included in the capital cost of the equipment. Software must be purchased with the related capital equipment. If software is purchased separately at a later date, it needs to be expensed on G/L 531952.

The Equipment Tagging Process

When equipment is purchased that needs to be tagged/capitalized, the following process takes place:

Inventory assigns the department, location and type code to the asset.
Inventory assigns a UNL identification number to the asset and creates a tag.
An asset record is created in SAP and Accounting sets the value of the asset.
The identification tag is sent with a memo containing the asset information to the department.
The department reviews the information in the memo and returns it to Inventory.
The department securely affixes the tag to the item in an accessible place.

Yearly Inventory Listings

Annually, the Inventory Department generates and distributes an inventory listing to the departments for review. The departments should make any necessary notations regarding items that have been returned to inventory, transferred to another dept or items received that are not included on the listing. These inventory listings enable the University to maintain accurate records.

Biennial Inventory Audit

Every two years the Inventory Department will audit the departmental inventory by performing a physical inventory inspection. These inventory listings are subject to review by State and Federal auditors so it is very important they are accurate.

Non-Monetary Donations and Gifts

Non-monetary donations and gifts (equipment, land, textiles, manuscripts, etc.) with a combined value of $5,000 or more that are received from outside sources need to be reported by completing the Donation/Gift Form. The value of each donation will be recorded to your department's 27 donation/gift WBS.* The donor must provide a value of the gift when it is donated. If the donor refuses to provide a value, the department/college is responsible for obtaining an appraisal so a value can be established. Donations cannot be valued by University staff/faculty. The recorded gift revenue and corresponding expense will net to zero and have no effect on the balance in the provided cost object. If the value of the donation or gift meets the criteria in the capitalization policy, it will be tagged and capitalized. Departments receiving non-monetary donations directly (not through the Foundation) should provide the Associate Vice Chancellor and Controller the donor contact information, description of item(s) donated, and value. The Associate Vice Chancellor and Controller will send a letter to the donor acknowledging receipt of the item(s) and thanking them for their generosity.

If you plan to dispose of the donated property within three (3) years of the date of the donation, please be aware of the IRS requirement related to Form 8282 . Such disposal may have a negative impact on the charitable income tax deduction claimed by the Donor. If you have any questions, please email Liwei He or Ben Mayeux.

*If your department does not have an established donation/gift WBS, please contact your Grant Coordinator in Sponsored Programs.