By Jewell Cochran
Fixed Assets, also referred to as Capital, are physical and contributed assets with value in excess of an amount determined by the Finance Committee or Executive Committee. The most common fixed assets are property and equipment, but they can also be intangible (i.e., loans). The expense associated with physical assets is called depreciation and amortization for intangible assets. Expenses are recognized over the life of the asset. Organizations should set a dollar amount for capitalizing a fixed asset, such as $1,000.
Fixed Asset Logs are needed to track details and inventory records, including date of acquisition, estimated useful life, and assigned fixed asset numbers. Equipment should be tagged at the time of purchase and a physical inventory should be taken annually. This is especially critical for assets purchased with grant funding.
Assets that survive their useful life and are obsolete are disposed of on the Fixed Asset Log. Assets sold are considered a loss or a gain depending upon the money received relative to the book value (purchase price less depreciation) at the time of sale.