2.0 - Asset Retirement
|Capital Asset Management|
|Rationale:||To define retirement reasons for the disposal of capital assets and ensure assets are fully utilized within the university before disposal. To comply with Indiana University Policies FIN-PUR-14.0, Disposal and Redistribution of University Property and FIN-PUR-14.1, Sale of Computing Equipment. To comply with OMB Uniform Guidance, "Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards".|
When assets are no longer needed by an organization, the department should first see if the asset can be used by another organization within Indiana University. The purchasing redistribution email list is used to advertise available equipment to other university organizations. Messages to the redistribution list can be sent using the following form: http://www.indiana.edu/~purchase/resources/forms/redistribution.php. If you wish to subscribe to this email list, click on the Subscribe to the Redistribution List link at the top of the page.
Processing the Asset RetirementEast, Indianapolis, Northwest, South Bend and Southeast For the campuses listed above the Campus Capital Asset Office representative will issue the Asset Retirement Document. To determine the Capital Asset representative for your campus, please refer to the Campus Contacts page found on the CAMS website. The organization can send an e-mail to the Campus Capital Asset Office representative that a retirement of an asset has occurred. The note should include the asset or tag number and the supporting documentation for the reason the asset is being retired.
Kokomo requires the organization to complete a “Capital Equipment Transaction form.” This form can be acquired by contacting Dave Hawkins.
All asset retirement documents for the Bloomington campus are issued by the organizations.
Retirement ReasonsThe following are retirement reasons and the procedures for each type of retirement:
AuctionThe Auction retirement reason is typically only used by the Surplus department. However, departments may use the reason of Auction for assets that were previously sent to IU Surplus for resale that did not have an Asset Transfer document filled out in KFS within 30 days of Surplus physically receiving the asset. Please note that retirements by reason of Auction by departments other than Surplus are considered “Out of Policy”. This is because policy states that the equipment should be transferred in KFS to the surplus account number within 30 days and Surplus will retire the asset with reason of Auction when the asset is sold by Surplus.
Bloomington, East, IUPUI, Kokomo and Southeast
The Organization will contact IU Surplus at IUB or IUPUI to determine if surplus assets can be sold through their facility. If your campus doesn’t have a surplus store, contact surplus at IUB or IUPUI to see if arrangements can be made for the sale of the asset on their campus. When assets are sent to Surplus at IU Bloomington or IUPUI, the sending organization, or Campus Capital Asset Representative must transfer the capital assets to Surplus within 30 days using the KFS Asset Transfer Document. If assets are transferred to Surplus, it is important the capital asset tag remains on the asset. Surplus will remove the tag and issue the Asset Retirement document when the asset is sold.
Northwest and South Bend
For the Northwest and South Bend Campuses, contact the campus purchasing department for disposition of surplus equipment. When assets are sold by the Office of Procurement Services, the asset should be retired using the retirement reason of auction.
CannibalizedUse retirement reason code of Cannibalized when an asset is dismantled. The asset retirement document should be issued within 30 days after the asset is dismantled. This will protect your organization from an unacceptable audit finding for an asset found (active) in inventory that has been retired. When assets are cannibalized it is important to remove the tag number. A note should be added to the retirement document that confirms the tag has been removed.
Some parts of the cannibalized asset may qualify as “post-cannibalization” assets. If the book value of the asset at the time of retirement is >=$5000, then further evaluation of the post-cannibalized parts is necessary. Please contact your capital asset office if the book value of the asset is over $5,000.
DestroyedUse retirement reason of Destroyed when the asset was unexpectedly destroyed. Examples would include assets destroyed by fire, accidents, vandalism, floods or other natural disasters.
DiscardedEquipment that was not considered viable for sale by Surplus and has been purposely removed from University possession without monetary transaction may be subject to retirement by reason of discarded.
If the asset(s) is too large, too numerous, or hazardous to move; the organization can contact the department listed below to move the asset:
• Bloomington, Physical Plant, 812-855-8728
• Indianapolis, Surplus, 317-278-1707
• East, Physical Plant, 765-973-8254
• Kokomo, Physical Plant, 765-455-9393
• Northwest Physical Plant, 219-980-6710
• South Bend Support Services, 574-520-4250
• Southeast, Physical Plant, 812-941-2330
Examples of environmental concerns or hazardous items include: televisions, office machines, computers, monitors/televisions, freezers and nuclear scientific equipment. (This list is not meant to be all inclusive but rather to provide examples of some of the more common hazardous items.) In addition, computers should only be discarded after all sensitive University data has been removed.
The tag should be removed when the asset is discarded and the retirement document issued within 30 days.
External TransferIndiana University may allow faculty members transferring from the university to take equipment purchased from contract and grant funds with them so long as they are transferring to another educational institution or nonprofit organization, and so long as they receive approval of their department chairperson, school dean, appropriate campus research office, and the Assistant Vice President of the Research and University Graduate School. These approvals need to be acquired before the retirement document is initiated. If approval is granted, the asset would be retired with reason of External Transfer within 30 days of the asset leaving the university. This retirement reason will require the name and contact information of the institution that will receive the asset.
Transfer of equipment purchased with University funds can be accomplished only with reimbursement to the University. All assets purchased with University funds will be priced by the Office of Procurement Services at the greater of the net book value or the fair market value. In this case, the appropriate retirement reason would be Sold (see #8 Sold) and not External Transfer.
GiftOnly after approval from Office of Procurement Services or the property designee for the campus, assets may be gifted to nonprofit organizations. The following conditions should be documented before gifting any assets:
• The asset has no utility for the university.
• The asset has no appreciable market value for resale.
• Any other approvals necessitated by the original source of funds for the procurement of the property has been obtained (e.g., conditions of a contract or grant).
LostAssets that cannot be found should be retired as lost only after every effort has been made to locate the asset. Once the asset has been identified as missing, the organization has 30 days to conduct the search for the asset. At the end of the 30 day period, the asset retirement document with reason of Lost would need to be issued. A note should be added to the retirement document that provides details as to the search that was performed. Upon review, the University Capital Asset Office may contact the organization for more information.
Once an asset is retired it can only be reactivated by the University Capital Asset Office using the net book value (NBV). The net book value is calculated using the original acquisition date, original cost and the useful life assigned to the asset and is the difference between the original cost and the accumulated depreciation. When the NBV is under the capitalization threshold the asset cannot be reactivated.
SoldUse the Sold retirement reason when arrangements are made with the Office of Procurement Services to sell assets outside of the IU Surplus Stores process. The asset retirement document is required to be initiated within 30 days of the sale. The sold retirement reason will require the buying institution or individual’s name, as well as the selling price. Remember to remove the tag from the asset when the asset leaves the university.
TheftThe retirement reason of Theft is used when assets are stolen. The asset retirement document for Theft requires an IUPD case number from the police report that was filed. The asset retirement document needs to be issued within 30 days of the date of the theft.
Trade-inThe asset retirement reason of Trade-in is used when the department and the Office of Procurement Services have determined that an existing asset will be traded in towards the purchase of like-kind equipment. The retirement document should be processed within 30 days of when the equipment is turned over to the vendor. The timeliness of the retirement is important because this will affect the book value of the asset given in trade. A note needs to be included that will inform the Capital Asset Office of the purchase order from which the new asset is being purchased.
Please note: If an asset is released to the vendor and no trade-in allowance (cost reduction) has been received, the asset retirement reason should be Discarded.
See CSOP 10.0 Trade-in of Similar Capital Equipment.
Other types of retirements (i.e., credits, assets created in error) are only processed by the University Capital Asset Office.
Capital Equipment- must have an acquisition value of at least $5,000 and a useful life expectancy of one year or more.
Equipment-The term “equipment” includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.
|Policy FIN-PUR-14.0 Disposal and Redistribution of University Property
Policy FIN-PUR-14.1 Sale of Computing Equipment
Policy FIN-ACC-I-170 Capital Movable Asset Physical Inventories, Tagging and Location Changes
|Organizations that purchase and maintain capital assets.|