SUBSECTION 3.2.1.1
GENERAL

3.2.1.1.1

Purpose

Effective Date:

July 1, 1998

3.2.1.1.1.a

The purpose of a fixed asset inventory system is twofold: 1) to gather and maintain information needed for the preparation of financial statements, and 2) to provide control and accountability over fixed assets,.

3.2.1.1.1.b

The policies contained in this chapter represent the minimum requirements to be met by state agencies. An agency may maintain its fixed asset inventory system in greater detail, using ancillary records as supporting documentation. The maintenance of detail records beyond the minimums set forth in this chapter is to be accomplished so as not to interfere with meeting these minimum standards and the extra cost is to be absorbed by the agency.

3.2.1.1.2

Authority

Effective Date:

July 1, 1998

3.2.1.1.2.a

The Budget and Accounting Act, Chapter 43.88 RCW, requires that the Governor, through the Director of OFM, devise and supervise a modern and complete, GAAP based accounting system for each agency to the end that all revenues, expenditures/expenses, receipts, disbursements, resources, and obligations of the state are properly and systematically accounted for. To accomplish this goal, fixed assets are to be accounted for and reported as state resources.

3.2.1.1.2.b

Section 43.19.1917 RCW requires OFM to develop a standard method, to be followed by state agencies, of maintaining records for state owned equipment.

3.2.1.1.2.c

Section 43.41.150 RCW requires OFM to provide for the maintenance of an inventory of state owned or controlled land resources by state agencies.

3.2.1.1.3

Applicability

Effective Date:

July 1, 1998

3.2.1.1.3.a

This chapter is applicable to and binding on all agencies of the state of Washington, unless otherwise exempted by statute. RCW 43.88.020 defines the term "Agency" to mean and include "every state office, officer, each institution, whether educational, correctional or other, and every department, division, board and commission, except as otherwise provided."

3.2.1.1.3.b

Agencies may request a waiver from complying with specific requirements of this chapter. The request must be in writing and approved in writing by OFM before the waiver takes effect. Waivers automatically expire at the end of the fiscal biennium for which they were granted and are to be reapproved in writing to remain in force.

3.2.1.1.3.c

This chapter is not applicable to museum and art collections held in trust for the use and benefit of the people of Washington State per RCW 27.34.070 by state historical societies as defined by RCW 27.34.020. Control of such collections is to be through cataloging systems maintained by the societies.

3.2.1.1.4

Responsible Agency Official

Effective Date:

July 1, 1998

Chapter 43.88 RCW delegates to agency heads full responsibility for managing the agency's financial affairs, including fixed assets. The agency head is to designate, in writing, one or more individuals responsible for maintaining and safeguarding the agency's fixed asset inventory. This individual(s) is to be the agency inventory officer(s).

3.2.1.1.5

Definitions

Effective Date:

July 1, 1998

3.2.1.1.5.a

Ancillary Costs - Costs, in addition to purchase or construction costs, related to placing a fixed asset into its intended state of operation. Normally, ancillary costs are to be included in the capitalized cost of a fixed asset; however, minor ancillary costs, not measurable at the time a fixed asset is recorded in an authorized property inventory system, are not required to be capitalized. Ancillary costs include such items as:

• For Buildings and Improvements Other Than Buildings - Professional fees of architects, attorneys, appraisers, financial advisors, etc.; damage claims; costs of fixtures permanently attached to a building or structure; insurance premiums, interest (refer to Subsection 3.2.1.2.1.c), and related costs incurred during construction; and any other costs necessary to place a building or structure into its intended state of operation.

• For Furnishings and Equipment - Transportation charges, sales tax, installation costs, extended maintenance/warranty contracts (refer to Subsection 3.2.1.2.1.b), and any other normal and necessary costs required to place the asset in its intended state of operation.

• For Land - Legal and title fees, surveying fees, appraisal and negotiation fees, damage payments, site preparation costs, and costs related to demolition of unwanted structures.

3.2.1.1.5.b

Buildings - A fixed asset which reflects the acquisition and capital improvement costs of a permanent structure owned or held by a governmental unit. Such improvements include not only structures in the form of office buildings, storage quarters, or other facilities, but also associated items such as loading docks, heating and air-conditioning equipment, refrigeration equipment, and all other property permanently attached to, or an integral part of, the structure. It does not include furniture, fixtures, or other equipment not an integral part of the building.

3.2.1.1.5.c

Construction In Progress - A fixed asset which reflects the cost of construction work undertaken, but not yet completed on capital projects.

3.2.1.1.5.d

Fixed Assets - Assets (normally tangible, but including several intangible) acquired by the state through donation, gift, purchase, capital lease, or self-construction, with a life expectancy of more than one year. Fixed assets do not include depletable resources such as minerals or timber, but do include that portion of capital projects classified as construction in progress.

3.2.1.1.5.d(1)

Capitalized Fixed Assets - Includes all land, and all remaining fixed assets with a unit cost of $5,000 or greater (also refer to Subsection 3.2.1.2.3).

• Fund Fixed Asset - Capitalized fixed assets acquired by and used in proprietary and similar trust fund type accounts. Fund fixed assets are recorded in the accounting records of the appropriate account.

• General Fixed Asset - Capitalized fixed assets used in the operations of governmental and expendable trust fund type accounts and recorded in the General Fixed Assets Account Group.

3.2.1.1.5.d(2)

Inventoriable Fixed Assets - Includes all capitalized fixed assets plus all fixed assets meeting the agency definition of small and attractive as defined in Subsection 3.2.1.1.5.j.

3.2.1.1.5.e

Furnishings and Equipment - A fixed asset which reflects the actual or estimated cost of property (other than land, buildings, construction in progress, and improvements other than buildings). Such assets include office equipment, furniture, machine tools, and motor vehicles. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to, or an integral part of, the building or structure, it will be classified as equipment and not buildings.

3.2.1.1.5.f

Improvements Other Than Buildings - A fixed asset which reflects the cost of permanent improvements (other than buildings) that add value to the land and/or leased facilities (leasehold improvements).

3.2.1.1.5.g

Information Technology Related Equipment - Includes fixed assets such as equipment, software, and products used in processing information, office automation, and telecommunications.

3.2.1.1.5.h

Land - A fixed asset reflecting the cost or estimated cost of land owned by the state. If land is purchased, the capitalized value is to include the purchase price plus costs such as legal fees, filling, and excavation costs which are incurred to put the land in condition for its intended use. If land is acquired by gift, the capitalized value is to reflect its appraised or fair market value at time of acquisition. Trust lands are to be accounted for by the administering agency. The following land classifications are used for asset reporting in the state of Washington:

• Uplands A100 - Those lands which do not front on bodies of water or those lands which abut, but do not include, tidelands, shorelands, harbor areas, or beds of navigable waters. Measured in tenths of acres.

• Beds of Navigable Water A200 - Those lands lying waterward and below the line of extreme low tide in navigable tidal waters and below the line of navigability in navigable lakes, rivers, and streams not subject to tidal flow, or the outer harbor line where a harbor area has been created. Navigable waters are considered to be all tidal water and nontidal waters found navigable by the courts bounded by meander lines or for which there is evidence of capability or suspectibility of use for commerce. Measured in tenths of acres.

• Shorelands A300 - The shores of a navigable lake or river belonging to the state, not subject to tidal flow, lying between the line of ordinary high water and the line of navigability. Measured to the whole unit front foot.

• Tidelands A400 - The shores of navigable tidal waters belonging to the state, lying between the line of ordinary high tide and the line of extreme low tide. Measured to the whole unit front foot.

• Harbor Areas A500 - The area of navigable waters between the inner and outer harbor lines where established by the Board of Natural Resources acting as the State Harbor Lines Commission in accordance with provisions of the State Constitution. Outer harbor line means a line located and established in navigable waters as provided in Section 1 of Article 15 of the State Constitution. Inner harbor line means a line located and established in navigable water between the line of ordinary high tide or ordinary high water and the outer harbor line, constituting the inner boundary of the harbor area. Measured in tenths of acres.

3.2.1.1.5.i

Library Resources, Museum and Art Collections - A fixed asset which reflects the cost of nondepreciable articles including books, documents, museum collections, and art works.

3.2.1.1.5.j

Salvage Value - The portion of a fixed asset’s cost that is recovered at the end of its service life less any disposal costs.

3.2.1.1.5.k

Small and Attractive Assets - Fixed assets with a unit cost (including sales tax and ancillary costs) of less than $5,000 which an agency considers particularly vulnerable to loss, thus subject to special property control. (Refer to Subsections 3.2.1.2.7, 8, 10, and 11.)