Fixed Assets Implementation – Movable Equipment

Transcript:Fixed Assets Implementation – Movable Equipment:
Fixed Assets Implementation – Movable Equipment New Natural Accounts Capitalization/Financial Reporting : Current vs. Proposed Process 1 The Purpose Implementing Oracle Fixed Assets to manage fixed assets and capitalization of capital projects We have analyzed the current process and are planning to implement improvements to the process for financial reporting and operation controls Currently the Plant Funds team must look at every purchase to every account to determine whether to account for it as an asset or not The new process will improve reporting controls between both general ledger and sub-ledger activities, support the units by providing more detailed financial data, improve the reporting on equipment for F&A where it is critical to know what costs are capitalized vs expensed. Accounts will be organized better for capitalized ME (over $5,000) and for capital budgeting, know what costs are being capitalized (i.e. for F&A reasons), and will help PF team reconcile Capital purchase definition = $5,000 or more, Rutgers owned, and has a future benefit of over 12 months We have organized the accounts based on the capital asset categories which are sometimes required by external and internal reporting (Lab equipment vs. farm equipment), (IT equipment vs. medical equipment) PF team will record which UDO owns each asset and reports will be available to units so that you can report on your assets The new process will be implemented for FY2021 budget Current Process The current process for ME Capitalization: Users in the field purchase items capitalized of nature to expense natural accounts 5/6XXXX. Plant Funds then capitalizes ME by debiting the asset cost to Central’s balance sheet and by crediting natural account 67040 on a Central Finance UDO, with FT 900. This eliminates the expense at the university consolidated level Initial natural account charged by department is not reduced - today it is too hard to eliminate by account, this is what we want to do going forward – we want to ensure the charge to the unit is the same account as the credit to Central Currently true expenses are comingled with the capital costs and it is difficult to separate them We will able to know what costs are expenses vs. what costs are capitalized Current Process - General Ledger Example : Units purchasing ME thru RU Marketplace NJMS PO for Capitalized ME – Server 840.6295.8759.3300.100.5056.58010 $11,499.96 Capitalizing NJMS PO# 1154581 ME – Server Dr. 900.1510.9999.0001.180.9999.18180 $11,499.96 Cr.