Fixed Assets Guidebook

Published by:
Reporting & Fixed Assets, a department of the Controller’s Office in Financial Services

Effective:
May 2009

Revised:
October 2024
 TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................................... 4
GOVERNING OFFICE AND REGULATORS ................................................................................................................. 4
RESPONSIBILITY, ACCOUNTABILITY, OWNERSHIP................................................................................................... 4
DEFINITION: FIXED ASSET........................................................................................................................................ 4
COMPONENTS ......................................................................................................................................................... 5
CAPITALIZATION ...................................................................................................................................................... 5
FIXED ASSETS IN BANNER........................................................................................................................................ 5
LEASES AND SUBSCRIPTION ASSETS IN DEBTBOOK ................................................................................................ 6
49ER MART .............................................................................................................................................................. 6
EQUIPMENT ACCOUNT CODES ............................................................................................................................... 6
ADDITIONS VS. EXPENSES ....................................................................................................................................... 6
MAINTENANCE ........................................................................................................................................................ 7
BUILDINGS/BUILDING IMPROVEMENTS ................................................................................................................. 7
MODULAR FURNITURE ............................................................................................................................................ 7
FIXED EQUIPMENT .................................................................................................................................................. 8
LAND........................................................................................................................................................................ 8
INFRASTRUCTURE.................................................................................................................................................... 8
FABRICATED EQUIPMENT ....................................................................................................................................... 8
SOFTWARE .............................................................................................................................................................. 9
RIGHT-TO-USE LEASE AND SUBSCRIPTION ASSETS ................................................................................................. 9
GROUPED ASSETS .................................................................................................................................................. 10
PILFERABLE ASSETS ............................................................................................................................................... 10
DEPRECIATION AND AMORTIZATION.................................................................................................................... 10
UNC CHARLOTTE USEFUL LIFE RANGES FOR FIXED ASSETS ........................................................................ 10
CONSTRUCTION IN PROGRESS (CIP) AND CAPITAL IMPROVEMENT PROJECTS .................................................... 12
SMALL CONSTRUCTION, REPAIR, AND RENOVATION PROJECTS .......................................................................... 12
GUIDANCE FOR SMALL CONSTRUCTION, REPAIR, AND RENOVATION PROJECTS COMPRISED OF MULTIPLE
PROJECTS ............................................................................................................................................................... 12
CHANGING LOCATIONS OF ASSETS AND TRANSFERS OF ASSETS ......................................................................... 12
TRADE-INS ............................................................................................................................................................. 13
DISPOSALS ............................................................................................................................................................. 13
GRANTS ................................................................................................................................................................. 13

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GIFTS...................................................................................................................................................................... 14
SPECIAL COLLECTIONS AND HISTORICAL TREASURES ......................................................................................... 144
TAGGING ............................................................................................................................................................. 144
PHYSICAL INVENTORY ........................................................................................................................................... 14
MISSING OR STOLEN ASSETS ............................................................................................................................... 155
SEPARATION OF DUTIES ...................................................................................................................................... 155
IMPAIRMENT OF CAPITAL ASSETS......................................................................................................................... 15
FIXED ASSETS FORMS ............................................................................................................................................ 15
USEFUL WEB LINKS.............................................................................................................................................. 166
UNC CHARLOTTE OFFICE OF LEGAL AFFAIRS RELATED POLICES ........................................................................... 16
CONTACT INFORMATION ...................................................................................................................................... 16

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INTRODUCTION
The University of North Carolina at Charlotte (UNC Charlotte) has made a significant investment in fixed assets,
and these assets are used to support its mission of providing education and research. The purpose of this
document is to ensure that assets are properly acquired, accounted for, maintained, and disposed. These
procedures are carried out in accordance with state policies, federal regulations, audit requirements, and
generally accepted accounting principles.

GOVERNING OFFICE AND REGULATORS

The North Carolina Office of the State Controller (OSC) requires their agencies to have an Internal
Policy/Procedure Manual to detail the agency’s capital asset requirements (NC OSC Policy 102.14).

The University of North Carolina (UNC) System Office provides oversight to the multi-campus University of
North Carolina system. As part of this oversight, they maintain the UNC Business Process Standards for Capital
Assets. UNC Charlotte complies with these standards in its own policies and procedures. The latest version of
the standards can be found on the Reporting and Fixed Assets website.

The Governmental Accounting Standards Board (GASB) is an independent, private sector organization that
establishes accounting and financial reporting standards for state and local governments in the United States.
GASB Statements No. 34, ‘Basic Financial Statements and Management’s Discussion and Analysis for State and
Local Governments’ (as amended) and No. 35 ‘Basic Financial Statements and Management’s Discussion and
Analysis for Public Colleges and Universities’ govern fixed asset accounting and reporting for public colleges
and universities.

RESPONSIBILITY, ACCOUNTABILITY, OWNERSHIP

All University fixed assets are owned by UNC Charlotte and not a specific individual. The University has sole
ownership of these assets except for:
• Equipment purchased with certain federal funds for a sponsored project
• Assets that are leased, in which case the University owns an intangible Right to Use the asset.
• Equipment that is on loan from another institution or business
All University employees are responsible for protecting UNC Charlotte property. They are accountable for care,
maintenance, and safe-keeping. Fixed assets are audited annually by the Office of the State Auditor.
Noncompliance with policies and procedures can lead to audit findings for the University. Consequences of
repeated audit findings include restrictions on how future state appropriations are spent. All University
employees, including Department Heads, Unit Directors, Provosts, Vice Chancellors, Deans, the Office of Police
and Public Safety, the Office of Grants and Contracts Administration, the Controller’s Office, and Internal Audit
have specific responsibilities with regards to fixed assets. These responsibilities are detailed in University
Policy 601.15 ’Control and Management of University Equipment and Other Property’ and the ‘Supplemental
Procedures’ to Policy 601.15.

DEFINITION: FIXED ASSET

A fixed asset is defined as tangible property with a total cost at the time of acquisition (or total acquisition
value at the time of donation in the case of gifts) equal to or greater than $5,000 and an estimated useful life
of two or more years. Software, other intangible assets including right-to-use leased assets have a higher
threshold (see the ‘Capitalization’ section below for more details). Some examples of fixed assets are land and
land improvements; general infrastructure; buildings and building improvements; machinery and equipment;
art, literature, and artifacts; software; and other intangible assets including right-to-use leased assets. Total

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costs are all costs necessary to place the asset in its location and its condition for use. Total costs include the
purchase price plus other necessary costs like shipping charges, legal fees, installation costs, sales tax,
surveying fees, demolition costs, and insurance premiums during the construction phase. All of these charges
combined must be $5,000 or greater ($100,000 or greater for software and other intangible assets; $1,100,000
or greater for right-to-use leased assets). Tangible assets can be touched or physically measured and include
equipment, vehicles, furniture, and buildings. Intangible assets lack physical substance and are non-financial in
nature. Intangible assets include software, patents, easements, land use rights, copyrights, trademarks, and
right-to-use leased assets. Fixed assets are acquired for use in normal operations and are not allowed to be
resold without written approval from the NC State Surplus Property Office.

COMPONENTS
Components are tangible property that are related to an existing asset. Components are depreciated, and can
be disposed of separately from the primary asset. As a component of a primary asset tag, an asset is grouped
with other items, but can be adjusted and depreciated independently. Components are referenced using the
primary asset’s tag number with an additional identifying letter at the end.

CAPITALIZATION
An asset becomes capitalized when it is recorded as a fixed asset in that University’s Statement of Net Position.
The acquisition cost of most fixed assets is depreciated over the useful life of the asset. Certain fixed assets,
however, are kept at their acquisition cost indefinitely; they are not depreciable. Non-depreciable assets
include land, collectibles, and other appreciable assets such as works of art. The benefits of capitalizing an
asset are improved accountability and consistency. Also, it provides comparability to the private sector. The
University capitalizes assets that have a value or cost of $5,000 or greater at the date of acquisition and an
estimated useful life of two or more years. Additionally, any capital item transferred from a component unit of
the University's reporting entity is recorded at the carrying value of the transferor. Intangible assets, including
right-to-use leased assets, right-to-use subscription assets (SBITAs) and grouped assets are the only exception
to the $5,000 capitalization threshold. Intangible assets with an estimated useful life of two or more years are
capitalized if they meet the following thresholds: 1) Purchased or licensed software, easements, land use
rights, patents, copyrights and trademarks are capitalized when the value or cost is $100,000 or greater, and 2)
internally generated software is capitalized when the value or cost is $1,000,000 or greater. Right-to-use
leased and subscription assets are recorded at the present value of payments expected to be made during the
lease or subscription term, plus any upfront payments and ancillary charges paid to place the underlying right-
to-use asset into service. Lease liabilities are capitalized as a right-to-use asset when the leased asset has a
cost of $1,100,000 or greater and an estimated useful life of more than one year. Subscription liabilities are
capitalized as a right-to-use asset when the subscription asset has a cost of $250,000 or greater and an
estimated useful life of more than one year. Similar assets purchased together with an individual cost less
than $5,000, are capitalized as a grouped asset when the total value or cost is $120,000 or greater and an
estimated useful life of more than one year. All other assets not meeting these thresholds are expensed in the
year of acquisition, including all furniture, machinery, and equipment with a cost of less than $5,000 or a useful
life of less than two years. Library books are generally not considered to have a useful life of more than one
year unless part of a collection and are expensed in the year of acquisition regardless of cost.

FIXED ASSETS IN BANNER

The Banner Finance System contains a module to track and manage capital assets. This module is called the
Fixed Asset System (FAS). Capital asset records in FAS are entered, updated and maintained by the Fixed
Assets Office in the Reporting and Fixed Assets Department. When a University department purchases new

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equipment, a requisition is created in the University’s electronic procurement system (49er Mart). The
Purchasing Office then places the order to buy the asset which creates a purchase order and liquidates the
requisition. An invoice will be received from the vendor and a three-way match will occur in 49er Mart with
the invoice, purchase order and departmental receiving. Once this has been completed, the invoice will be
sent to Banner to be paid on the due date. After the invoice is paid, an origination tag is created. The Fixed
Assets Office converts the origination tag to a permanent tag, capitalizes the asset, and sets depreciation; all of
this is done in FAS. When Inventory Control physically tags the asset, they obtain any additional information
related to the asset such as the custodian, location, serial number, manufacturer, and model number, and they
record it on a Tagging Sheet. Upon receipt of the Tagging Sheet from Inventory Control, the Fixed Asset Office
enters the additional asset information into FAS. The information maintained in FAS is used to determine the
total net book value of fixed assets on hand and to track the University’s fixed assets records for all financial
reporting purposes. Grouped assets are recorded in FAS by type and year, however they are not tagged and
not included in the inventory count.

LEASES AND SUBSCRIPTION ASSETS IN DEBTBOOK

The DebtBook software tracks and manages leases that are within the scope of GASB 87, Leases and
subscription assets that are within the scope of GASB 96, Subscription-Based Information Technology
Arrangements. Lease and subscription assets are entered, updated and maintained by the Financial Reporting
team in the Reporting and Fixed Assets Department. DebtBook calculates all necessary accrual entries to be
posted to Banner, and provides amortization schedules and stores documentation for each lease and
subscription agreement.

49ER MART
The University’s electronic procurement system, 49er Mart, was implemented at UNC Charlotte in July 2010 in
order to streamline purchases from the University’s most popular vendors. The Fixed Assets Office is an
account code approver in 49er Mart for purchases equal to or greater than $5,000 and for purchases charged
to a capital expense account code. For capital asset purchases, the correct account code must be used in order
for the requisition to be approved. For account code resources, see the ‘Equipment Account Codes’ section.
Additional documentation, such as a quote from the vendor or use of internal notes, is required in 49er Mart
to help the Fixed Assets Office easily identify the assets being purchased.

EQUIPMENT ACCOUNT CODES

See the ‘Expense Account Code List’ and ‘Expense Account Code Descriptions’ resources on the Reporting and
Fixed Assets website for a list of appropriate account codes.

ADDITIONS vs. EXPENSES

An addition or improvement to a building or other asset that costs $5,000 or more and increases the service
capacity or extends the useful life of that building or asset is considered a new fixed asset. Such an asset is
capitalized as a component of the original parent asset. For examples and additional information, refer to the
resource titled ‘Construction Projects: Asset Categories and Other Guidance’ on the Reporting and Fixed Assets
website. Maintenance agreements and other maintenance costs or repairs to existing spaces such as carpeting
and painting are not new assets and are considered expenses.

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MAINTENANCE
Maintenance keeps assets in working condition and doesn’t extend the useful life of an asset for accounting
purposes. Some examples are painting, carpeting, new parts, and plumbing repairs. These are charged as a
repair or maintenance expense and are not considered fixed assets. University departments should review
these types of costs annually to determine if a service contract is a cost-effective option. Note: Service
contracts are also repairs and maintenance expenses, and accordingly, they are not capitalized. See the
‘Expense Account Code List’ and ‘Expense Account Code Descriptions’ resources on the Reporting and Fixed
Assets website for a list of appropriate maintenance codes.

BUILDINGS/BUILDING IMPROVEMENTS
Buildings are permanent structures, have a life of seventy-five years, and are depreciated. Existing buildings
are valued at purchase price or, if donated, the acquisition value at the time of donation. Newly constructed
buildings are valued at the end of construction with a total cost that includes the labor and materials (both
internal and external) as well as the cost of fixed equipment and other permanently attached fixtures such as
carpeting, HVAC, electrical, and plumbing systems. In addition, the capitalized cost of any building (purchased
or constructed) includes all charges necessary to put the building into its intended state of operation. Such
costs include professional fees for brokers, attorneys, architects, appraisers and financial advisors as well as
any interest paid on related debt during the period of construction.

After a building is inspected by the State Construction Office, the University will receive a Letter of Acceptance
and the building can then be occupied. Buildings are recorded in Banner’s Fixed Asset System and depreciated
using a half-year convention basis. Under this convention, it is assumed that the property being depreciated
was placed into service at the midpoint of the year. This means that in the first year, regardless of occupancy
date, six months of depreciation is taken. For all subsequent years, 12 months of depreciation is taken each
year until the final year when another half-year (six months) of depreciation is taken.

A building addition, renovation, or improvement is capitalized when it exceeds the University’s capitalization
threshold and also increases future service potential of the building or extends the building’s useful life. Such
events are capitalized as assets separate from the building (also known as components of the building); and
therefore, they have their own useful lives. Such events must also be clearly distinguished from repair and
maintenance costs, which are expensed rather than capitalized. Buildings are not considered to be fully
depreciated until all separately accounted for component assets of that building (i.e. capitalized
additions/renovations/improvements to the building) have also been fully depreciated.

When components or portions of a building are removed as part of a renovation or replacement project that
meets the criteria for capitalization, the original asset being replaced is removed from the books if its value is
material to the financial statements or if component accounting was used when the building was originally
capitalized.

If a building is leased, the University must determine if the lease is within the scope of GASB 87, Leases, and
meets the capitalization policy. If it does, then it is recorded as a right-to-use leased building and a lease
liability. For further details please see section “Right-to-use Leased Assets”.

MODULAR FURNITURE
Modular work stations or cubical office installations are generally not capitalized due to one or more of the
following facts and circumstances: (1) they are not considered affixed to the building and therefore not
considered part of the building but equipment, (2) each item in the installation is considered a single piece of
equipment due to the ability to interchange or reconfigure the installation, and/or (3) it is unlikely that the

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value of an item, after including a prorated share of the labor cost of installation, would equal or exceed the
capitalization threshold.

FIXED EQUIPMENT
Fixed equipment includes any equipment affixed to a building. Such equipment may be secured, bolted or
otherwise fastened to a wall, ceiling, or floor. It also includes equipment that is contained in a built-in space
(such as a wall or counter area) as well as any equipment connected to a building via electrical wiring, gas
pipes, water pipes or other similar attachments. By definition, all dishwashers, ovens, refrigerators, and
freezers will be considered fixed equipment unless they are specifically designed to be mobile. Generally, such
equipment would have the word “mobile” in their title (such as a “mobile icemaker” or a “mobile freezer”).
Other examples of fixed equipment include fume hoods, emergency power generators, sinks, refrigerated
drinking fountains, lockers, movable partitions, fixed seating in auditoriums and lecture halls, security systems,
built-in projection screens, chalk/bulletin boards, and window blinds/shades.

LAND
Land is considered to have an unlimited life; and therefore, it is not depreciated. Land can be purchased or
donated. Purchased land is recorded at its purchase price plus any related charges such as site preparation
expenditures, professional fees, and legal claims directly attributable to the land acquisition. Donated land is
capitalized at its acquisition value at the time of donation. After ownership has been established, UNC
Charlotte’s Real Estate Office submits an Asset Update Form to the State Property Office and the NC
Department of Administration.

If land and building(s) are acquired together, the value of the land is determined separately from the
building(s) and is recorded in the land account. If land and a building are acquired together with the intent to
raze the building, the cost of razing the building is capitalized as part of the cost of the land.

INFRASTRUCTURE
Infrastructure is a long-lived capital asset that is normally stationary. Examples of infrastructure include roads,
bridges, tunnels, dams, towers, tanks, wells, parking areas, fences, and exterior lighting systems. Other
structures and improvements such as sidewalks, curbs and gutters, irrigation systems, general signage,
pedestrian bridges, paved paths, fountains, and swimming pools are also considered infrastructure.

FABRICATED EQUIPMENT
Fabricated equipment is equipment that is constructed by combining materials into one identifiable asset. All
of the parts must work as one unit, and the parts alone cannot be considered fabricated assets. The total of all
the parts must be $5,000 or greater and have a useful life of two or more years to be considered a fixed asset.
Fabricated equipment that meets the threshold will be tagged, inventoried, and recorded as one asset. The
department producing the fabrication has the responsibility for tracking the costs and notifying the Fixed
Assets Office. The fabricated equipment account code 944085 must be used when entering requisitions in
Banner or 49er Mart for all parts of the fabrication. In addition, the name of the project must be referenced in
document text (Banner) or internal notes (49er Mart). A Fabricated Equipment Form must be completed at
the start of the fabrication. This form must be submitted by June 15th of each fiscal year until the fabrication is
complete. A description of each piece of the fabrication is required so it can be capitalized as either a
completed asset or an asset in progress at year end.

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SOFTWARE
Purchased or licensed computer software that has a cost equal to or greater than $100,000 and a perpetual
life is capitalized as an intangible asset and amortized on a straight-line basis over its estimated useful life.

Internally generated computer software that has a cost equal to or greater than $1,000,000 and a useful life of
two or more years is also capitalized as an intangible asset and amortized on a straight-line basis over its
anticipated useful life. Computer software is considered internally generated if it is developed in-house by
University personnel or by a third-party contractor on behalf of the University. Commercially available
software that is purchased or licensed by the University and modified using more than minimal incremental
effort before being put into operation is also considered internally generated. Any of the following activities
would satisfy the “modified using more than minimal incremental effort” criterion: changing code, changing
fields, adding special reporting capabilities, and testing any changes. Unlike purchased or licensed software,
the capitalization threshold for internally generated software is not applied on a per unit basis. Capitalizable
costs should only include direct costs of materials and services consumed in developing or obtaining internal-
use software, payroll and payroll related costs devoted directly to the project, and interest costs incurred
during development. Upgrades and enhancements should be capitalized only to the extent that they increase
the functionality or efficiency of the product, or extend its estimated useful life. Costs related to the
preliminary project stage (e.g. conceptual formulation and evaluation of alternatives) should be expensed as
incurred. Likewise, costs in the post-implementation/operation stage (e.g. training costs and software
maintenance costs) should be expensed as incurred. For additional guidance, see GASB 51 ‘Accounting and
Financial Reporting for Intangible Assets’ and NC OSC Policy 102.10 ‘Intangible Assets Policy’. All other
internally generated software that costs less than $1,000,000 or has a useful life of less than two years should
be treated as non-capital software and expensed in the current fiscal period.

For a list of appropriate software account codes, see the ‘Expense Account Code List’ and ‘Expense Account
Code Descriptions’ resources on the Reporting and Fixed Assets website.

The University has contracts with external parties for the right to use information technology software and
cloud computing arrangement (network) assets that are called subscription-based information technology
arrangements (SBITAs). See ‘Right-to-use lease and subscription assets’ section below for details.

RIGHT-TO-USE LEASE AND SUBSCRIPTION ASSETS

Leased assets are capitalized as a right-to-use asset when the total cost of the noncancelable agreement is
$1,100,000 or greater. Subscription assets are the recorded from Subscription-Based Information Technology
Arrangements (SBITAs). The University enters SBITAs for the right to use information technology software and
cloud computing arrangement assets from external parties. The SBITAs expire at various dates, and some have
renewal options. Subscription assets are capitalized as a right-to-use asset when the total cost of the
noncancelable agreement is $250,000 or greater. Amortization for right-to-use lease and subscription assets is
computed using the straight-line method over the shorter of the lease/subscription term or the underlying
asset’s estimated useful life. If a lease agreement contains a purchase option the University is reasonably
certain will be exercised, the right-to-use lease asset is amortized over the asset’s estimated useful life.

Right-to-use lease and subscription assets are recorded at the present value of payments expected to be made
during the lease or subscription term, plus any upfront payments and ancillary charges paid to place the
underlying right-to-use asset into service. The expected payments are discounted using the interest rate
stated per the SBITA contract, or the University’s estimated incremental borrowing rate if there is no stated
contractual rate. Short-term leases/subscriptions (less than or equal to 12 months at inception) are not within

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the scope of GASB 87, Leases, and GASB 96, Subscription-Based Information Technology Arrangements, and
therefore related payments are accounted for as expenses in the current period.

GROUPED ASSETS
Machinery and equipment assets are capitalized as a grouped asset if they are purchased together with a total
cost of $120,000 or greater, but a unit cost below the $5,000 threshold, and a useful life of more than one
year. Assets that meet the criteria to be classified as a grouped asset for the fiscal year are capitalized as a
single asset in FAS by type and year and are depreciated using the straight-line method. The useful life is
determined by the type of grouped asset, i.e. grouped assets – EDP equipment has a 4 year life. Grouped
assets are identified and maintained by the Fixed Assets Office and are not required to be tagged or
inventoried. They are written off in Banner when they are fully depreciated.

PILFERABLE ASSETS (INCLUDING LAPTOPS, COMPUTERS, MONITORS, DATA PROJECTORS AND OTHERS)
Pilferable assets are items that have a ready resale value and are subject to theft. The assets the University
considers pilferable assets are typically not tagged and inventoried by the Fixed Assets Office since their
individual cost usually falls below the $5,000 capitalization threshold. It is a requirement that individual
departments maintain their department’s current inventory with a tracking log for all laptops, computers,
monitors, data projectors and other pilferable assets valued between $1,000 and $5,000 . A google tracking
sheet prepared by the Fixed Asset team is available for use. Each department will annually attest that they are
tracking pilferable assets valued between $1,000 and $5,000. Each department’s assets (including pilferable
assets) are subject to inspection by the UNC Charlotte Internal Audit Department during periodic internal
audits.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization are the allocation of the total acquisition cost of a capital asset over its
estimated useful life. The term depreciation relates to tangible assets, while the term amortization relates to
intangible assets. Depreciation and amortization at UNC Charlotte are recorded annually at fiscal year-end.
UNC Charlotte uses the straight-line method to allocate costs of all of its depreciable assets over their useful
lives for financial reporting purposes. Under the straight-line method, depreciation or amortization is
calculated by taking the total cost (minus any salvage value) divided by total productive years. The total
productive years for an asset are known as its useful life. UNC Charlotte has established the useful lives for its
fixed assets using OSC guidelines. The assumed salvage value for purposes of depreciation is zero. The right to
use leased assets is amortized over the noncancelable term of the agreement.

Most assets begin depreciating based on their in-service date, and depreciation is calculated on the basis of
the nearest full month. The exception is buildings, building improvements, and infrastructure which are
depreciated using a half-year convention basis (see “Buildings/Building Improvements” section).

UNC CHARLOTTE USEFUL LIFE RANGES FOR FIXED ASSETS

DESCRIPTION ACCOUNT CODE USEFUL LIFE IN YEARS (as
of June 4, 2024, with the
exception of Grouped
Assets)
Furniture 940501 20
Office Reception Equipment 940510 10

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 DESCRIPTION ACCOUNT CODE USEFUL LIFE IN YEARS (as
of June 4, 2024, with the
exception of Grouped
Assets)
Lan Equipment 942710 12
PC/Printers 942720 12
Server Equipment 942730 12
Voice Communications 942760 12
Wan DP Equipment 942780 12
Non Wan DP Equipment 942770 12
Networking Equipment 942711 15
Video Equipment 942800 12
Science Equipment 2-12 year life 944510 12
Engineering/Draft Equip 2-12 year life 944520 12
Science Equipment > 12 year life 944540 20
Engineering/Draft Equip > 12 year life 944550 20
Musical Equipment 944560 15
Audio Visual Equipment 944580 15
Other Educational Equipment 944590 15
Motor Vehicles 946502 15
Motor Vehicle Trailers 946530 15
Utility Vehicles 946540 15
Motor Vehicle Other 946590 15
Security Equipment 947510 20
Athletic Equipment 947520 20
Grounds Keeping/Maintenance Equip. 947530 15
Kitchen Equipment 947550 20
Telecom Equipment 947560 12
Other Capital Equipment 947600 20
Buildings 948110 75
Building Renovations, additions, room 948110 50
repurpose
Fire & Sprinkler Systems (in buildings) 948110 30
Elevators (in buildings) 948110 30
Handicap Lifts (in buildings) 948110 20
Plumbing, HVAC, Electrical (in buildings) 948110 24
Fixed Equipment (in buildings) 948110 15
Roofs (on buildings) 948110 20
Other Structures 948610 30
Landscaping 948180 75
Fences 948840 75
Dams 948840 75
Utility 948610 75
Roads 948610 35
Parking 948610 75
Exterior Lighting 948610 75

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Land, certain land improvements (excavation, grading, etc.), construction-in-progress, inexhaustible works of
art, and historical treasures are not depreciated. Land is considered to have an unlimited useful life, and its
salvage value is unlikely to be less than its acquisition cost.

CONSTRUCTION IN PROGRESS (CIP) AND CAPITAL IMPROVEMENT PROJECTS

Construction in Progress (CIP) reflects the construction cost of buildings or other major improvement projects
that are not completed at the time of annual financial reporting. The total labor, material, and fixed equipment
costs that have been incurred at that time are capitalized temporarily as Construction in Progress. Once these
projects are finished, they are known as Completed Capital Improvement Projects. It is at that time that each
asset is separately classified, capitalized, and depreciation is set. Funding for capital improvement projects is
determined by the UNC Charlotte Budget Office. The money used for Capital Improvement Projects originates
from the General Fund, debt financing, capital gifts, and departmental funds. Rarely, Capital Improvements
Projects are financed with federal grant money.

SMALL CONSTRUCTION, REPAIR, AND RENOVATION PROJECTS

Small Construction, Repair, and Renovation Projects are those whose costs are less than $500,000 and are
handled through the Facilities Management Design Services group. They are identified through the Fixed
Assets Office’s analysis of the Design and Capital Services expense accounts at fiscal year-end. The Fixed
Assets Office researches these expenses and communicates with Facilities Management to determine if these
expenses need to be reported as capitalized projects. “Small construction, repair, and renovation projects” are
sometimes referred to as “Informal Projects”; however, usage of the term “Informal Projects” in this manner
should not be confused with the State’s usage of the term (which has no bearing on budgeting or accounting,
and only affects Facilities Management’s processes).

Monitoring of Facilities Management Design Services’ “Project Priority List” also occurs during the year.
Projects on the priority list that indicate a Project Workflow Status as either Construction, Project Completed,
or Punch List and the approved project total is greater than $75,000 will be reviewed for possible
capitalization.

GUIDANCE FOR SMALL CONSTRUCTION, REPAIR, AND RENOVATION PROJECTS COMPRISED OF MULTIPLE
PROJECTS
There may be a need to evaluate multiple projects within a Design Services priority list project. Determine if
the total project cost is greater than $75k (the threshold for determining when to evaluate a project for
potential capitalization). If it is not, the project should be expensed; if it is, since the project is comprised of
multiple projects grouped together, the scope and cost of each individual project should be obtained to
determine if each individual project should be capitalized. As an example: For a $500k project to install door
actuators in ten buildings across campus, obtain the cost and scope of the actuator installations by
building. For each individual project (or building in this case) that meets the $75k threshold, determine if it
meets the criteria for capitalization (increases the buildings service potential or useful life). For each individual
project that does not meet the $75k threshold, determine if it contains any fixed equipment greater than $5k
(the capitalization threshold for equipment). If it does not, expense all costs associated with the individual
project; if it does, determine if the equipment meets the criteria for capitalization (increases the buildings
service potential or useful life).

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CHANGING LOCATIONS OF ASSETS AND TRANSFERS OF ASSETS
Before an employee physically changes the location of an asset, the relevant, required form must be
completed. All Fixed Assets eforms are routed to the Fixed Assets Office for processing.

• When an asset is being moved within the department (e.g. to another room or building) or when an
asset is being moved to another department, use a Fixed Assets Disposition and Change Form. This
form must be reviewed and approved by the Department Head/Authorized Approver. When you
transfer a fixed asset within the department or between departments, the asset will maintain the
same value and depreciation as it was recorded originally.
• When a department intends to move or relocate an asset outside of the UNC Charlotte campus, an
Off-Campus Equipment Use Form must be completed.
• When a department intends to transfer an asset to another agency, a Fixed Assets Disposition and
Change Form must be completed. Equipment used on or off campus is for business related purposes
only.

TRADE-INS
If a department believes that trading in equipment is better than the other disposal options, they must
coordinate their process with the Purchasing Office and the Fixed Assets Office. A Fixed Assets Disposition and
Change Form must be completed. The Purchasing Office will obtain approval from the North Carolina State
Surplus Office’s Director of Auxiliary Services. Once all signatures have been obtained, the final
documentation is sent to the Fixed Assets Office so the asset can be accounted for properly.

DISPOSALS
There are several reasons to dispose of a fixed asset. Some instances are when the equipment is no longer
needed, it becomes obsolete, parts are no longer available, or the asset is being cannibalized to sustain
another asset. University departments cannot dispose of any asset on their own. A Fixed Assets Disposition
and Change Form must be completed. The UNC Charlotte Surplus Property, Receiving and Stores department
will make the decision to dispose of the asset or forward to the NC State Surplus Property Office to be sold. If
the latter, the asset is sold to the highest bidder. If the asset doesn’t sell, the NC State Surplus Property Office
allows UNC Charlotte Inventory Control and Surplus Property Office to dispose of the asset as they see fit. The
net book value of a disposed capital asset is removed from the accounting records. This involves removing the
acquisition cost and accumulated depreciation of each asset.

GRANTS
Fixed assets acquired with federal funds are subject to the Federal guidelines of the Office of Management and
Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (commonly called ‘Uniform Guidance’). Property acquired with grant funds that has a total cost equal
to or greater than $5,000 is tagged, entered in the Fixed Asset System, and inventoried. When the University
does not hold title to such property, it is flagged in the Fixed Asset System, not capitalized, and not included
with the University’s asset totals. For additional requirements associated with grant property, University
departments should refer to the specific regulations of the contract and its awarding agency as well as
University Policy 601.12.

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GIFTS
In addition to cash donations, gifts given to UNC Charlotte may be in the form of equipment, art, manuscripts,
rare books, and other fixed assets. The Vice Chancellor for Development & Alumni Affairs and the Vice
Chancellor for Business Affairs have the authority to accept such gifts. The UNC Charlotte Office of University
Advancement is responsible for issuing the official gift receipt. The Fixed Assets Department receives a
quarterly Gift-in-Kind report from Treasury Services, which details all non-cash gifts received by the University.
Any gifts of equipment or other fixed assets that meet the $5,000 capitalization threshold are entered into the
Fixed Asset System and capitalized. In addition, for any donated collectibles (e.g. art, manuscripts, rare books),
the Fixed Asset Office notifies the Special Collections & University Archives department in the Library, and they
add such items to their respective inventories. Those inventories are then provided to the Fixed Assets Office
annually for inclusion in the University’s asset totals. Capital gifts-in-kind are recorded at acquisition value at
the time of donation. For more information regarding gifts, see University Policy 602.2.

SPECIAL COLLECTIONS AND HISTORICAL TREASURES

Special collections and historical treasures include art, artifacts, sculptures, manuscripts and rare books. These
items are capitalized at their historical cost or their acquisition value at the date of donation. These items are
held for public exhibition, education, and research in furtherance of public service, rather than financial gain;
they are protected, kept unencumbered, cared for, and preserved; and the proceeds from sales of collection
items are used to acquire other items for collections. These items are considered inexhaustible; and therefore,
they are not depreciated.

TAGGING
The Fixed Assets Office issues tags that contain a bar code and 9-digit number. The Inventory Control &
Surplus Property Office physically tags assets. If an existing tag becomes defective, the department should
contact the Fixed Assets Office in order to have a replacement tag issued. Buildings, land, infrastructure, and
software are assigned an asset number and recorded in Banner but are not physically tagged. An ‘O’ tag, or
origination tag, is a temporary tag that Banner will assign to an item when an invoice is paid out of a fixed asset
expense account. A ‘P’ tag is a permanent tag that the Fixed Assets Office assigns from an O Tag. A ‘D’ Tag
stands for a document tag that is created when journal entries are entered against fixed asset accounts. D tags
are converted into O tags. Components are identified with the same 6 digits as their parent asset and have an
additional identifying letter at the end of number. The first component will have an A at the end of the tag
number; the second component to the parent asset will have a B, and so on.

PHYSICAL INVENTORY
An inventory of all fixed assets, except for grouped assets, is conducted annually. This is coordinated by the
Fixed Assets Office and performed by the individual departments or Inventory Control & Surplus Property
Office. Any new equipment that has not been tagged yet must be included in the inventory and added to a
department’s inventory list. Department Inventory Liaisons will be contacted by the Inventory Control &
Surplus Property Office to schedule an appointment to conduct the inventory if Inventory Control & Surplus
Property Office is to verify the respective department’s physical inventory. ALL fixed assets must be checked
and verified. An updated inventory list will need to be signed by the Department Head and returned to the
Fixed Assets Office within 10 business days. Any assets that have been stolen, surplused, missing/lost, or
moved to another location require a Fixed Assets Disposition and Change Form. If the asset has been stolen, an
official copy of the police report will need to be attached to the form as well. For any assets that are currently
being used outside of campus, an Off-Campus Equipment Use Form needs to be completed. Both of these
forms will be routed to the Fixed Assets Office. When there is new management within a university
department, it is recommended that inventory be checked again internally and any changes noted with the

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Fixed Assets Office. In cases of asset-related fraud involving a department head or custodian, an interim
review of the inventory will be carried out in consultation with Internal Audit.

MISSING OR STOLEN ASSETS

• Stolen assets: Per OSC Policy 102.17 and University Policy 601.15, an employee must report thefts of
assets to their supervisor within three days. Their supervisor must report the theft to the Department
Head as soon as possible. The Department Head must notify the Fixed Assets Office and Police and
Public Safety as soon as possible. An investigation will be done by UNC Charlotte Policy and Public
Safety, who will then submit a report to the Director of the State Bureau of Investigation (SBI). The SBI
will further investigate and contact the district attorney if legal action is necessary. UNC Charlotte is a
state agency; therefore, all fixed assets are indirectly owned by the state of North Carolina and are
subject to its laws and penalties. In addition, if stolen asset(s) contains sensitive data such as personal
identifying information, contact must also be made with the responsible office over the investigation
and reporting of loss of sensitive data (Legal Office, ITS, Internal Audit).
• Missing assets: The Fixed Assets Office will contact individual departments with a list of assets that
were considered missing for at least one year. The department must confirm if these assets have been
found or were still missing. For further information regarding missing or stolen assets see the
Procedures Supplemental to Policy Statement #601.15. In addition, if missing asset(s) contains
sensitive data such as personal identifying information, contact must also be made with the
responsible oversight office over the investigation and reporting of loss of sensitive data (Legal Office,
ITS, Internal Audit).

SEPARATION OF DUTIES
The fixed asset responsibilities are distributed among multiple departments and positions. This separation is
necessary for adequate internal control. The Fixed Assets Office assigns tags and performs all data entry into
the Banner Fixed Asset System. This includes capitalization, depreciation, ongoing asset record maintenance,
and disposals. The Fixed Assets Office also coordinates the annual inventory process. The Central Receiving
and Stores department checks in and receives assets for those departments that do not have their own loading
dock. The Inventory Control & Surplus Property Office conducts the physical tagging and annual verification of
fixed assets and the disposal of University property. University departments must document each staff
member’s responsibility in regards to their fixed assets. It is important to maintain a separation of duties so
proper internal controls are achieved.

IMPAIRMENT OF CAPITAL ASSETS

A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. Some
indicators of impairments are evidence of physical damage (e.g. from a fire, hurricane, or tornado), changes in
legal or environmental factors, technological change or obsolescence, changes in manner or duration of use, or
permanent construction stoppage. An example of an impairment is a natural disaster that damages a
classroom building that can no longer be occupied until it is repaired. The Controller’s Office requests
feedback annually from the applicable departments to determine if there are any material asset impairments.
If any material impairments are identified, adjustments are made to the related assets prior to their inclusion
in the Annual Comprehensive Financial Report (ACFR) and Annual Financial Statements.

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FIXED ASSETS FORMS
Effective 07/01/2017, all Fixed Assets Forms are electronic forms with workflow. The respective eForms can
be accessed at the links below:
• Fixed Assets Disposition and Change Form
Use this eform to surplus assets; report assets that are lost, stolen, or cannibalized for parts; trade-in
assets; transfer an asset to another UNC Charlotte Department; transfer an asset between agencies;
transfer assets from warehouse (used by Receiving and Stores); change the name of the custodian or
location of an asset within your department.
• Building & Infrastructure Disposition Form
This eform is for use only by Facilities Management personnel to record the disposition of a building or
infrastructure asset.
• Off-Campus Equipment Use Form
Use this eform to create a new off-campus equipment use agreement or to extend or terminate an
existing agreement. Agreements can only be effective for one year at a time.
• Fabricated Equipment Form
Complete this eform to report and track the costs associated with the fabrication of equipment. This
includes instances when multiple items are purchased on more than one purchase order, and those
items will be combined to make one asset. A more detailed definition of fabricated equipment is
provided on the form.

USEFUL WEBPAGES
• UNC Charlotte Reporting and Fixed Assets Web Page: Reporting and Fixed Assets | Financial Services
• UNC System Office Business Process Standards for Capital Assets: Located on the Reporting and Fixed
Assets website in the ‘Manuals/Guides/Procedures’ section.
• NC Office of the State Controller: Capital Asset Policies
• GASB: http://www.gasb.org/

UNC CHARLOTTE OFFICE OF LEGAL AFFAIRS RELATED POLICES

• Policy 601.15 Control and Management of University Equipment and Other Property:
https://legal.charlotte.edu/policies/up-601.15
• Procedures Supplemental to Policy 601.15: https://legal.charlotte.edu/UP-601.15-
SupplementalProcedures
• Policy 601.10 Surplus Property Procedures: https://legal.charlotte.edu/policies/up-601.10
• Policy 601.12 Acquisition of Surplus, Excess, Gift, & Grant Property:
https://legal.charlotte.edu/policies/up-601.12
• Policy 601.1 University Supplies, Equipment, & Materials: https://legal.charlotte.edu/policies/up-601.1
• Policy 602.2 Solicitation & Acceptance of Gifts: https://legal.charlotte.edu/policies/up-602.2

CONTACT INFORMATION
The Reporting and Fixed Assets Department is located on the 2nd floor of the Reese building. The department
serves under the Vice Chancellor of Business Affairs, as part of Financial Services, and reports to the University
Controller. A list of office personnel and their contact information can be found here:
https://finance.charlotte.edu/about-us/offices/controllers-office/reporting-fixed-assets.

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SOURCE INFORMATION FOR THIS DOCUMENT

UNC Charlotte Policy 601.1

UNC Charlotte Policy 602.2
UNC Charlotte Policy 601.10
UNC Charlotte Policy 601.12
UNC Charlotte Policy 601.15
North Carolina Office of the State Controller, Capital Assets Policies
North Carolina Office of the State Controller, North Carolina Accounting System Expenditure Accounts
UNC System Office, Chart of Accounts
UNC System Office, Business Process Standards for Capital Assets
www.GASB.org

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