Vendor sends the invoice to Accounts Payable for payment.
Accounts Payable creates the invoice (see Accounts Payable and Cash Disbursement section) which triggers the creation of the temporary origination tag (O-tag) in the fixed assets system.
This monthly process creates the accounting entries to convert capital expenses to assets in the general ledger and records the accounting entries to expense and accumulate depreciation for these assets over their useful life.
Responsible position(s):
Fixed Assets Accountant
Required documents and access:
Banner fixed assets
Frequency and timing:
Monthly before month-end closing.
Steps:
Capitalize fixed assets expenses in origination tags (O-tags).
Run a report of invoiced purchases from capital expense accounts since the last report.
FFPOEXT Fixed Asset Orig. Tag Extract in audit mode
Printer – DATABASE
Parameter Values 01 - Audit
SAVE
RELATED > Review Output
File name ... Select .lis file.
TOOLS > Export
Review the report to identify items to capitalize.
T-temp
C-capital
l-invoice
If multiple O-tags make up a single asset (e.g. if the line item detail did not get consolidated on the purchase order), the full value of the asset can be added to one O-tag and all other O-tags can be deleted. Alternatively, individual O-tags may be capitalized then attached to the main asset O-tag to ensure all O-tag amounts are combined into the net book value of the asset.
Run queries (Argos or Banner) to compare capital expense to O-tags to make sure all capital expenses are to be capitalized.