Policy Steward: 
Manager of Analytical Ops
Format Updated: 
University Policy & Standards Converted: 
Revision Date: 
Monday, January 30, 2017

* This information replaces FIS 607 Depreciation


  • FIS 607:  Depreciation
    • All fixed assets (except land, special art and museum collections, Library Special Collections, and historical collections) valued at $5,000 or greater and with a useful life of more than one year are required to be depreciated. Note: modular furniture and furnishings are not capitalized because each piece can be used or discarded individually.

      Capital equipment will be depreciated in compliance with applicable Governmental Accounting and Standard Board (GASB) accounting and reporting standards for State, Higher Education Institutions & 503c charitable institutions.

      Depreciation is calculated as part of the monthly closing process through FIS Banner on a straight line method with zero salvage value and useful lives that vary depending on the type of asset.

      In general, an asset purchased during a month will receive a full month of depreciation regardless of the date purchased. For proprietary funds, depreciation expense and gains and losses will post directly to the fund from which the capital asset was purchased. Assets purchased with non-proprietary funds will capitalize and depreciate in the Net Investment-in-Plant fund (890000). 

      NOTE: Inventory value is driven by the acquisition cost of an asset. Fully depreciated equipment will continue to remain on inventory as long as it is functional and in use.

      Equipment is added to the capital inventory mainly through the purchasing process.  The receipt of gifts with a stated market value of $5,000 or greater must be reported by units through the OSU Foundation (OSUF) and/or Ag Research Foundation (ARF). The Fixed Asset Property Managers within Business Affairs retrieve a report from the OSU affiliated foundations so gifted equipment can be set up properly in the capitalized inventory.

    • When an item is added to the capital inventory, Business Affairs, Fixed Assets assigns an asset type code that corresponds to a specific useful life.  See FIS-Ex003-04: Fixed Asset Type Codes.
    • Some granting agencies maintain title of equipment until the grant is closed.  If it has been booked as a federally owned asset, when the governmental agency releases the equipment it is then booked at the current value as if it had been the property of OSU and depreciation had occurred from the beginning.  
    • On a gifted item, OSU often pays a percentage of the acquisition cost.  In that case, the value of the gift is booked at only the amount OSU has paid, not the full value of the gift, unless the gifted portion is acknowledged through OSUF.
    • Library general collections must be identified and valued at the lower of cost or market value at the time of acquisition or donation.  The general collections must be capitalized on the general ledger.  They do depreciate.  The valuation method must be documented and retained for audit purposes.  The library general collection holdings are to be separated based on year of acquisition.

      Buildings, Improvements to Buildings, and Improvements other than Buildings (IOTBs) are considered fixed assets. Buildings and Improvements to Buildings valued at $100,000 or greater and with a useful life of more than one year are required to be depreciated. IOTBs valued at $50,000 or greater with a useful life of more than one year are also required to be depreciated.

      OSU Buildings are componentized when capital construction costs are $10 million or greater and estimated Organized Research usage is 10% or greater of the total ASF (Assignable Square Footage).

      Land improvements include infrastructure that broadly serves campus grounds/facilities rather than a specific building or land parcel and specific site improvements that are depreciated. Land Improvements valued at $100,000 or greater and with a useful life of more than one year are required to be depreciated.

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