Property Management Policy & Procedure Manual
Section 000: Introductory Material
Issuing a purchase order with a Capital account code
When an on-line purchase order is issued using the 40xxx account code (see PRO 202: Purchases), the Document Level Accounting flag must be set to null, which changes the PO to Commodity Level Accounting. This ties an accounting distribution to each commodity on the purchase order. When commodity level accounting is used, the accounting information and commodity value information feeds into the invoice and the Fixed Asset system ‘origination’ tag file (see below).
Issuing an invoice with a Capital account code
When payment is processed against a Purchase Order, the invoice defaults to the commodity level of the original document. If a direct-pay invoice is processed for equipment, it must also be processed on commodity level accounting with a 40xxx account code for each commodity that creates a fixed asset. The data from each commodity line automatically feeds into the fixed asset module, creating a temporary record (see Origination Tag, below). The invoice must have text providing information from which the asset record will be completed. This includes:
The asset description, beginning with generic noun
The Responsible Organization code (Department Org)
Completed date [if the asset is a Work-in-Progress (WIP), please include WIP in text]
Location (Building/Room number)
Condition (Excellent/Good, Fair, Poor)
Acquisition Code (PF, PS, LP, etc.)
Functional Use Code
Responsible person (Custodian/PI), PI Code/Make, if used, as well as EIN
When this is an auxiliary fund purchase through a FSxxxx index or an authorized plant fund 8xxxxx, the JV text must include the accurate Fund-Org-Program code for the index where the depreciation should post.
Note any important additional information, such as whether or not this is a trade-in or upgrade
If more than one asset is purchased on an invoice, information must be provided for each asset. Additional basic information for assets acquired on federal funds include quantity received, unit price and unit of measure, posting reference and date of transaction (see FAR 45.505-1). This information defaults into the asset record from the invoice.
NOTE: When a capital asset and other items (supplies or minor equipment) are being purchased on the same invoice, care must be taken in the setup of the commodity line. The capital asset should have its own commodity line, and the related funding line should have only one account code - 40xxx. If the related funding line for a commodity is mixed between 40xxx and another account code, the asset record doesn't feed into the fixed asset module properly and the resulting origination tag must be disposed of, then recreated and capitalized.
Sample Text From a FIS Banner Invoice
Source of Funding
Units may purchase equipment out of multiple indexes except in two instances:
Equipment purchased by Service Centers and Auxiliaries must be funded solely by the unit and must be used solely in support of the unit for which it was purchased.
Equipment purchased on a grant or contract where the sponsor retains title, either fully or conditionally, must be purchased solely from that grant or contract.
Assets purchased on multiple funds will reflect those funds in the asset record. If multiple assets are purchased on an invoice with multiple indexes, and each asset is being purchased by a specific index, a commodity line must be created for each asset and tied directly to the specific index.
Each commodity line from an invoice with a 40XXX account code creates a temporary record in the fixed asset module. This record is called an 'origination' tag (or 'O-tag'). The record number begins with a 'T' followed by 7 digits, and is the basis for creating the asset record. An origination tag must be created for each asset purchased on an invoice. It is no longer acceptable to issue a purchase order or invoice for 'one lot'. This will necessitate either one commodity line per asset, or multiple units under quantity if several of the same item are being purchased. (An O-tag is created for each unit when the quantity is more than one.) Fixed Assets Property Management converts the O-tag number into a 6-digit inventory number and completes the inventory record with the information provided in the invoice text.
An attachment is defined as a piece of equipment that is integral to the parent asset (they become one). When processing PO's and invoices the value of such items should be combined with the value of the parent, rather than listed separately. On occasion such pieces are backordered causing multiple invoices for one asset. In these cases, account code 40199 (Equipment Under Construction) should be used for all invoices. When all pieces have been received and payment processed, a journal voucher should be processed moving the cost to 40XXX. The journal voucher should have the necessary text to create the asset record. See PRO-Ex2: Completing a Journal Voucher for information on 'fabricated equipment'.
Freight and other capitalized expenses
As per the OSU policy defining an asset, shipping costs may be included in the capital value of an asset. Installation costs should also be included in the capital value of the asset.
Since information from the PO/invoice feeds the Fixed Asset Module, the information should correctly reflect the physical reality of the asset. Shipping and installation charges should not be set up as commodity lines on the invoice. Instead they should be entered as 'additional amounts' to the primary unit.
Service Centers and Auxiliaries
The invoice payment process is a little more complex for service centers and auxiliaries. Please see the instructions in PRO 202: Purchases for the correct method.