HBP Part 20.3.4. Capital Asset Records

Handbook of Business Procedures

Date published: August 28, 2013
Last revised: August 28, 2013
Issued by: Records Management Service

20.3.4. CAPITAL ASSET RECORDS

A. Retaining Capital Asset Documentation

Capital assets are tangible or intangible property that have an estimated useful life of greater than one year. Capital assets include inventoriable items, such as equipment, furniture, boats, vehicles, and animals.

The Texas State Records Retention Schedule (RRS), Item 4.7.004, requires the retention of records documenting the purchase of capital assets for the entire life of the asset and for three years after the asset has been removed from inventory. The University of Texas at Austin Records Retention Schedule (UTRRS) code AALL545 sets forth retention requirements to comply with this administrative rule of the state.

Financial records (including payment vouchers) centrally imaged by Records Imaging Services (RIS) and available through the Image Retrieval System (IRS) are retained in accordance with all retention requirements that apply to them.

Departmental retention of master capital asset records is very difficult because of the length of time the records must be retained. It is recommended best practice to verify that all documentation pertaining to capital asset expenditures is imaged and available in the IRS. If a department verifies that capital asset records are complete and accurate in the IRS through visual verification, the department bears no further responsibility for maintaining the imaged capital asset records.

Records pertaining to inventory are closely audited, therefore when a department declares it will maintain its capital asset records, the department must keep the records in good order and be able to produce the records at any time. These records are subject to multiple audits, including federal, state, and internal.

B. The University of Texas at Austin Records Retention Schedule (UTRRS) Codes Pertaining to Capital Asset Records

All purchasing and procurement transaction documentation is listed in the UTRRS under codes such as AALL476 Purchase Voucher, AALL570 for Purchase Orders. When a capital asset is purchased, multiple codes apply to the record. For example, both AALL476 and AALL545 apply to the purchase of a computer. Because the computer is a capital asset, the purchase voucher used to purchase the computer must be retained following the requirements for both codes. When more than one code applies to a record, the longest retention period must be applied.

C. Applying UTRRS Code AALL545 Capital Assets to Documentation Retained in the Department

UT code AALL545 requires that documentation for capital assets be retained for the life of the asset and for three years thereafter. The university process for removing an item from the university’s inventory is the end of the life of that asset, and the three years’ additional retention begins. Any item that is still in use is not considered terminated even if the item is fully depreciated/depreciated to zero value.

D. Types of University Records That Require Capital Asset Retention

The following is a list of records (or their equivalents) that document the acquisition of and payment for capital assets in accordance with university business operations:

  • Bid and purchase order vouchers
  • Payment vouchers including*DEFINE VP1, VP2, and VP7 documents, and any other documentation that is required to approve and process the payment
  • *DEFINE VC1 wires
  • *DEFINE VT5 and VT7 vouchers
  • *DEFINE VT6
  • Transfers-in documentation
  • Transfers-out documentation (to other departments, universities, agencies, private entities, including sales, salvage, trade-ins, and donations)
  • Gift documentation
  • Completed fabrication of equipment

E. Categories and Object Codes Used For Capital Assets

Capital Assets: Equipment (S-11d – Schedule of Changes in Investment in Plant: Equipment)

Capital Assets: Intangible Assets (S-11g – Schedule of Changes in Investment in Plant: Intangible Assets)

 

Part 20. Records Management - Table of Contents