Oregon State University

607 Depreciation

Fiscal Operations Manual
Section 600: Plant Funds and Fixed Assets
Effective: 01/01/2003
Revised: 12/27/2012


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.

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. Policies and procedures have been established by OUS Controllers Division in Fixed Assets Accounting Policies 55.100

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 through the purchasing process.  However, departments need to report the receipt of gifts (both directly to the unit and through OSU Foundation and/or Ag Research Foundation) with a stated market value of $5,000 or greater to Business Affairs, Fixed Assets.

  • 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-Ex 003-04: Capital Inventory Assets Codes for actual 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 the OSU Foundation.

Library general collections must be identified and valued at lower of cost or market value at 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 and Improvements other than Buildings (IOTBs) are considered fixed assets (those valued at $50,000 or greater and with a useful life of more than one year) and are required to be depreciated. 

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.

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