Capital Assets

Q)    What is the definition of a capital asset?

A)    A capital asset is an item that has a useful life of greater than one year and a unit cost of $5,000 or more.
EXAMPLE 1:    Department X purchases 10 computers, and the invoice total is $16,000. Although these assets meet the first criterion of having a useful life greater than one year, their per unit cost of $1,600 is less than the $5,000 minimum. These computers will be expensed in the year of purchase and not considered for capitalization.
EXAMPLE 2:    Department X purchases 1 computer with a cost of $16,000. This item is a capital asset under Drexel's capitalization policy because it meets both the life and cost per unit criteria.

Q)    My department is getting ready to requisition the purchase of a capital asset. Are there certain accounts that I should use?

A)    Yes. The following accounts distinguish between the different types of capital assets and should be used when completing a purchase requisition.

6305

Furniture/Equipment >$5,000

6310

Software/Computers >$5,000

6315

Maintenance Equipment >$5,000

6320

Transportation Equipment >$5,000

6325

Building Equipment >$5,000

6330

Other Equipment >$5,000

Q)    Is there anything else that I need to do after my capital asset is delivered?

A)    No. A member of the General Accounting staff will contact the requisitioner within a few weeks of the purchase to schedule a time to tag the asset. This tag number will be referenced on the annual confirmation of assets report forwarded by the Comptroller's Office.

Q)    I am ready to junk, sell, trade-in, or otherwise dispose of a capital asset. What should I do?

A)    Complete the Capital Asset Disposition Form for Drexel or College of Medicine. For more information, contact Leamsy Cruz in the General Accounting Office at extension 1432.

Q)    Who has responsibility for the capital assets in my department, including completion of the annual Capital Asset Confirmation Report?

A)    We recommend that a capital asset custodian be appointed as the liaison between the purchaser of the equipment and the General Accounting Office. The cost center administrator should provide the name of the custodian to Leamsy Cruz in General Accounting. If a custodian has not been appointed, the cost center administrator will be contacted for all capital asset information.
If you have questions about capital assets, please contact Leamsy Cruz at extension 1432.