OVERVIEW

The acknowledged gain or loss on the sale or write-off of a fixed asset is recorded in the Net Investment in Plant fund.  It will be the responsibility of the designated individual on each campus to complete the necessary actions.

If a gain or loss is recognized as a result of a sale of an asset, the receipt of funds will be recorded in the Net Investment of Plant fund and then transferred to a Renewal and Replacement plant fund established for this purpose.  If the proceeds should be allocated to a campus department, a non-mandatory transfer will be done from the Renewal and Replacement fund into the appropriate departmental fund.  The purpose of this approach is to record the gain/loss transactions centrally for reconciliation and identification purposes.

A gain or loss may be recognized at the time the asset is removed from the Fixed Asset system if there is a ‘current book value’ (CBV) remaining on the books.  Appendix G outlines the various transaction scenarios, the entries required and the associated accounting models.  Banner will record the appropriate transactions in the Fixed Asset system and feed the information to Finance.  Adjustments to the permanent tag of an item need to be identified so as to not recognize an erroneous gain or loss.

The campus Fixed Asset manager will be responsible for writing off the tags in the Fixed Asset system.  Accounting or support staff, if other than the campus Fixed Asset manager, will be responsible for recording the cash receipts and journal voucher transactions when an asset is sold.  It will be necessary to get the document number generated from the write off adjustment in order to record the gain/loss entries accurately.  If a fixed asset is being removed from the system with no accompanying cash transaction, no further action is required other than the write off adjustment.  The campus Fixed Asset manager should supply a report of all items removed from fixed assets on a regular basis to accounting staff for review.