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Capital Assets

The Capital Asset Accounting Office works with campus and system departments in the administration of all capitalized asset accounting which includes accounting for equipment assets, CIP assets, plant assets, and other agency vested assets.

State regulations require that campus departments perform an annual physical verification of all equipment assets in the asset management database.  This is essential for continued Federal, State, and private donor funding of operations and research projects.

The following items will help new equipment asset representatives become familiar with the acquisition, use, upkeep, tracking, and disposition of capitalized assets:

Definitions


Account Number - The seven-digit general ledger code representing a functional program/unit used to record, classify, and report.

Acquisition Cost of Non-Expendable Personal Property - The net invoice unit price of equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it is acquired.  Other charges, such as the cost for installation, transportation, taxes, duty, or protective in-transit insurance, shall be included in the unit acquisition cost in accordance with University accounting practices.

Asset Edit - A Kuali Financial System (KFS) e-Doc used to update the asset description, manufacturer, model number, serial number, asset representative, or location.

Asset Number - A system-generated number assigned to an asset record when it is created in KFS.

Asset Representative - The individual responsible for maintaining continuous accurate records, periodically reporting location and condition, coordinating the annual physical inventory, insuring appropriate property usage, safekeeping, and maintenance of all property.  The principal investigator who is responsible for initiating and conducting research, training, or public service projects, is normally the asset representative for an extramurally funded award.   

Asset Retirement - A KFS e-Doc used to relieve custodial responsibility for an asset that is sold, lost, obsolete, damaged beyond economic repair, etc.

Asset Tag - The unique UH control number assigned and affixed to the asset, when possible, for identifying an item or property which is supported by record of cost, location, asset representative, etc.

Asset Transfer - A KFS e-doc used to assign custodial responsibility of an asset to another account.

Capital Asset - Includes either movable or non-movable assets that benefit more than a single fiscal period.  Typical examples of non-movable assets are land, land improvements, infrastructure, buildings, and building improvements.  Movable capital assets include equipment.

Capitalization Threshold - The minimum unit value at which an item is defined as equipment and added to the fixed asset records (UH currently utilizes a capitalization threshold of $5,000).

Component - A part of a system or fabrication.  System components may be auxiliary or accessory items.

Controlled Property - Tangible, non-expendable personal property less than $5,000 per unit which is not capitalized and meets either of the following criteria:

  • Any firearms/weapons;
  • Property which is Federal or agency owned under the provisions of an extramural award and is accountable to the University.

Custodial Department - The department or unit of the University having physical control of property (i.e., using department or sponsoring department for contract or grant).

Donated Equipment - Any property given, bequeathed, or granted to the UH by a public or private organization or by an individual for an expressed purpose and for other restricted or unrestricted purposes.

Equipment - Any tangible, non-expendable personal property that is capitalized and meets the criteria set forth in AP 8.550, Capitalization.

Excess Property - Property which is no longer required by a department, but not necessarily excess to the University’s system-wide needs and is subject to screening, transfer, or retirement action.

Fabricated Equipment - Equipment that has been constructed or assembled into one identifiable unit.  The cost assigned to the unit is the total of its component parts, materials, consumable supplies and applicable labor.

Found Property - Property discovered by the custodial department which does not appear on the inventory records. In reporting such property, estimated value must meet the capitalization criteria set forth in APM AP 8.550, Capitalization.

Impairment - A significant, unexpected decline in the service utility of a capital asset.  Service utility is the usable capacity that a capital asset was expected to provide at its acquisition.

Inventorial Property - Tangible, non-expendable personal property which meets the capitalization criteria of AP 8.550, Capitalization and controlled property.

Leased Property - Property acquired by the UH under a lease or rental agreement with a vendor.

Loaned Property - Property which is either borrowed by the University from an external agency or from one University department to another; or loaned by the University to an external agency or individual that is approved by the department head with mandatory notification to the Capital Asset Accounting Office.

Materials/Supplies - All personal property including consumables not classified as equipment or controlled property.

Non-Capital Asset - An asset that does not meet the criteria for a capital asset or controlled property.

Non-Inventorial Personal Property - Property that is expendable or consumable.

Off Campus Location - Used to designate the physical location of the property when no specific location code has been assigned.  It includes name, address, city, state, postal code, country name, and off-campus keeper. 

Ownership - Designated by the alphabetical suffix assigned to the last position in the moveable and non-moveable asset object code as follows:

  • “A” – Owned by another agency;
  • “F” – Owned by the Federal government;
  • “G” – Owned by the University and funded by the Federal government;
  • “U” – Owned by the University.

Personal Property - Property of any kind except real property (i.e., land, land improvements, infrastructure, buildings).  It may be tangible (having physical existence) or intangible (having no physical existence) such as patents, inventions, and copyrights.

Personally-Owned Property - Property in which title vests with an individual and for which the UH assumes no responsibility for its loss, repair, or maintenance.

Property Administrator - Capital Asset Accounting Office is responsible for the management and control of all capital assets and controlled property records in which the title is vested with the University, the Federal government, or other agencies.

Salvage - Property that, because of its worn, damaged, deteriorated, or incomplete condition, has no reasonable prospect of sale or use as serviceable property without major repairs or alterations, but which has some value in excess of its scrap value.

Scrap - Property that has no reasonable prospect of sale except for the recovery value of its basic materials content.

Sold Property - Surplus University-owned property sold to an external entity.

Subsequent Acquisition - Costs incurred subsequent to the initial acquisition or fabrication of an equipment item that extends the life or increases the production capacity and has a unit acquisition cost of $1,000 or more.  Subsequent acquisitions that are greater than or equal to $5,000 will be assigned its own asset tag.

Surplus Property - Any property that no longer has any value to the University or to the State.

Traded-In Property - Surplus University-owned property which has been traded-in for the purchase of new property.

FAQs

Q:  What is a Capital Asset?

A:  Capital Assets are either movable or non-movable assets that benefit more than a single fiscal period.  Typical examples of non-moveable assets are land, land improvements, infrastructure, buildings, and building improvements.  Moveable capital assets include equipment.
Q:  What is the definition for equipment?
A:  Any tangible, non-expendable personal property that has a useful life of more than one year and an acquisition cost of $5,000 or more per unit.
Q: How does Capital Asset Accounting Office know when to create assets for equipment?
A: Transactions that are coded to equipment object codes are fed into the KFS Capital Asset Builder (CAB).  Documents such as PREQs, advance deposits, disbursement vouchers, general error corrections, distribution of income and expense, internal billings, purchasing card, and RCUH transactions will appear in the KFS CAB only if they are coded with equipment object codes.
Q: What is the difference between controlled property and non-capital assets?
A: Controlled property is defined as tangible, non-expendable personal property less than $5,000 per unit which is not capitalized and meets either of the following criteria:

  • any firearms or weapons and
  • property which is federally-owned or agency-owned under the provisions of an extramural award and is accountable to the University.  Controlled property assets are established by Capital Asset Accounting Office.
Q: What is an asset tag?
A: An asset tag is the unique UH control number assigned and affixed to the asset, when possible, for identifying an item or property which is supported by record of cost, location, asset representative, etc.
Q: What if it is impossible to affix the asset tag onto the equipment?
A:  In those situations where asset tags are impossible, if not impracticable, to place on the property, records with the issued asset tags shall be maintained indicating the location and description of such property.
Q: How does a department obtain replacement asset tags?
A: Capital Asset Accounting Office purchases sequentially numbered tags from a  vendor and once the original tag is lost or physically damaged, CAAO cannot issue a replacement or duplicate tag.  The tag number assigned to an asset remains with the equipment for life.  Custodial departments, asset representatives or fiscal administrators shall use alternate methods to affix a replacement label onto the equipment which should indicate "University of Hawaii" and the tag number.
Q: Can University of Hawai`i equipment be used for personal use?
A: Personal use of UH equipment is not permitted.  Equipment may be removed from campus if it is in the best interest of the UH and used in conjunction with UH activity or work.  An equipment loan eDoc must be submitted in the CAM module.

Q: What do the letters at the end of the asset object codes mean?
A: The letters at the end of the object codes are the ownership codes.  Ownership codes are designated by the alphabetical suffix assigned to the last position in the moveable and non-moveable asset object code as follows:

  • “A” – Owned by another agency
  • “F” – Owned by the Federal government
  • “G” – Owned by the University and funded by the Federal government
  • “U” – Owned by the University
Q:  How do I go about donating equipment?
A:  When transfer of excess equipment to another department within the University or to another State of Hawai`i department is not feasible, the surplus property may be donated to a non-profit, tax-exempt charitable organization or to a city or county agency within the State.  Submit an asset retirement global eDoc in KFS.
Q: What if a building room number is not listed in the Kuali Financial System?
A: Contact Capital Asset Accounting Office to request the addition of the room number into KFS.  You will be asked to provide the room number and the building room type (i.e., office, classroom, research laboratory, conference room, etc).

Contact Us

Capital Asset Accounting Office
1408 Lower Campus Road, 46
Honolulu, HI  96822
Phone Number:  (808) 956-8735
pfmo@hawaii.edu

Name

Area of Responsibility

Phone Number

Email

Karen Morimoto

Director

956-2279

karenhm@hawaii.edu

Suzanne Izumi

UH equipment acquisitions, equipment reporting and disposition to extramural sponsors, sale of equipment

956-2118

sizumi@hawaii.edu

Marita Tom

RCUH equipment acquisitions, annual inventory verification reports, non-capital assets

956-8735

mdctom@hawaii.edu

Kelcie Watai

Real property construction transactions, plant fund financial reporting, building and room number tables

956-3103

kelciew@hawaii.edu

 

Policies & Guidelines

Hawai'i Revised Statutes

§103D - Hawai‘i Public Procurement Code

Hawai'i Administrative Rules

§3-11-129 - Surplus Property
§3-11-130 - Inventory Management

Office of Management and Budget (OMB) Circulars

A-21 - Cost Principles for Education Institutions
A-110 - Uniform Administrative Requirements
A-133 - Compliance Supplement

Governmental Accounting Standards Board (GASB)

GASB Statement No. 34
GASB Statement No. 35

Administrative Procedures

AP 8.509 - Property and Equipment Overview
Prescribes the procedures and responsibilities for the management of equipment and controlled-property owned by or in the custody of the University of Hawaii. It provides definitions for key terms and federal sponsoring agency requirements.

AP 8.510 - Loaned Property, Personally Owned Property, and Collections
Establishes uniform guidelines and procedures regarding loaned property, personally owned property, and records of equipment and controlled property maintained as collections.

AP 8.512 - Identification of Property
Establishes uniform guidelines and procedures for identifying equipment and controlled property of the University of Hawaii.

AP 8.516 - Property and Equipment Valuation
Provides uniform guidelines and procedures for establishing the value of equipment and controlled property recorded in the University of Hawaii Kuali Financial System.

AP 8.521 - Property and Equipment Acquisition
Provides uniform guidelines and procedures for establishing property records and assigning asset tags for new acquisitions of equipment and controlled property in accordance with the University of Hawaii, State, and Federal requirements.

AP 8.523 - Receiving Property and Equipment
This AP provides uniform guidelines and procedures for receiving equipment and controlled property purchased, furnished, or loaned to the University of Hawai`i.

AP 8.524 - Property and Equipment Maintenance
This AP provides uniform guidelines and procedures for the proper care and maintenance of equipment and controlled property accountable to the University of Hawai`i.

AP 8.530 - Property and Equipment Storage and Movement
This AP established uniform guidelines and procedures for the proper storage and movement of equipment and controlled property in the custody of the University of Hawai`i.

AP 8.536 - Subcontract Control of Government Property
Prescribes responsibilities and general guidelines for federally-funded government property acquired by a University of Hawai`i subcontractor.

AP 8.539 - Property and Equipment Record Maintenance
This AP establishes uniform guidelines and procedures for establishing and maintaining the equipment and controlled property records of the University of Hawai`i.

AP 8.540 - Physical Inventory
This AP prescribes the responsibilities and general procedures for conducting the annual physical inventory of equipment and controlled property.

AP 8.541 - Property and Equipment Management Reports
This AP sets forth the responsibilities for reporting equipment and controlled property in compliance with the requirements of the UH, the State, the Federal Government, and other extramural sponsors.

AP 8.542 - Property and Equipment Utilization
Establishes uniform guidelines and procedures for the utilization of expendable personal property, equipment, and controller property accountable to the University of Hawaii. Ensures property purchased or acquired by the University are utilized in accordance with University procedures, State of Hawaii, and Federal regulations.

AP 8.543 - Property and Equipment Transfer and Retirement
Describes the process, roles and responsibilities associated with transferring or retiring of University of Hawaii and sponsor-owned equipment and controlled property in accordance with University procedures, State of Hawaii, and federal regulations.

AP 8.550 - Capitalization
Establishes capitalization policies and procedures for the proper accounting treatment of the University of Hawaii's capital assets to ensure conformity with Federal and State regulations and generally accepted accounting principles.

AP 8.555 - Impairment of Capital Assets and Retirement of Real Property
Establishes the guidelines for reporting and accounting of impaired capital assets in accordance with GASB Statement No. 42 and the general responsibilities for reporting and recording the retirement of University-owned real property.

AP 8.635 Accounting For Leases
Procedural guidelines to assist Fiscal Administrators with determining operating versus capital leases so that proper accounting is done in the KFS.

 

Forms

PFMO-31 - Property Loan and Indemnification by Non-University Personnel
PFMO-73 - Fabricated Equipment
PFMO-73C - Substantial Completion of Fabricated Equipment
PFMO-75 - Request for Relief of Accountability
RMP-001 - State of Hawai‘i Report of Loss or Damage of State Property
SPO Form 26 - State of Hawai‘i Transfer of Property