Expenses that do not meet the policy definition of a fixed asset may not be charged to capital expense accounts and expenses that do meet the policy definition of a fixed asset may not be charged to operating expense accounts.
Each responsible position in the procedure is responsible for understanding the definition of fixed assets and ensuring the appropriate expense account coding of purchases.
Requester – department purchasing fixed asset
Purchasing
Accounts Payable
Board approval
Banner purchasing, fixed assets
As requisitions are submitted for board-approved capital assets and projects
Requester submits a requisition to purchase a board-approved fixed asset. If the purchase is not included in the approved capital budget plan, the requester requires the President to approve the purchase. The requisition follows the normal purchasing approvals (see Requisitions and Purchase Orders section).
Purchasing
Warehouse or farm staff receive the asset(s) and confirm receipt in Banner.
Sources the capital asset, if not already sourced by the requester, with quotes, bids, or a formal RFP award, if applicable, according to purchasing procedures (see Purchasing section).
Creates the purchase order for the capital asset, combining all capitalizable expenses in one line item with a concise description that easily identifies the asset.
All components of the purchase that will be capitalized must be charged to a capital expense account, e.g. asset, shipping, installation, taxes, calibration, site preparation, etc. and included in the single line item.
The purchase order line item(s) generates the temporary origination tag (O-tag) in Banner. (If the purchase order splits component parts into separate line items, each line item charged to a capital expense account will generate a separate O-tag that must be combined and attached to the main asset O-tag.) If vendors require line-item detail, this can be added in additional line-item text without line-item costs in the amount fields.
If the purchase includes capital and noncapital items, Banner recommends separate requisitions for capital and noncapital items for best practice for fixed assets functionality.