Common Terminology
Below are several terms that are used throughout this User Guide for
reference. Many other terms can be found in the topics discussing the
Fixed Asset Transaction Type.
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Accumulated DepreciationAccumulated Depreciation
Each recording of a depreciation expense
update is offset by a posting to an Accumulated Depreciation account.
AcquisitionAcquisition
An acquisition is the process of acquiring
a new fixed asset at historical cost (that is, the original cost)
by an entity. Entities will report an amount for fixed assets that
equals the related fund expenditures incurred to purchase or construct
the fixed asset. In cases where an asset is gifted, the historical
cost is typically the current market value.
Asset
ImpairmentAsset
Impairment
An asset that is worth less on the market
than the value recorded is considered impaired. This will result in
a write-down of that same asset account to the stated market price.
BettermentBetterment
Adding value to an existing fixed asset due
to improvements/additions made to the fixed asset.
COACOA
A common acronym that stands for chart of
accounts, which is used to refer to the collection of chart of account
fields found in the Responsibility Center of Fixed Asset Headers or
on the Accounting Line.
Composite
AssetComposite
Asset
Composite assets consisting of multiple components
are depreciated as single asset based on depreciation attributes established
on the asset header. Individual sites policy will govern whether an
asset should be defined as composite or not. Typical examples of composite
assets are infrastructure assets such as highways, roads and bridges.
DepreciationDepreciation
The allocation of the net costs of the fixed asset over its estimated
useful life is accomplished by decreasing the value of an asset by
the amount of this allocation (depreciation).
DispositionDisposition
An asset is considered disposed when retired
due to sale, destruction, obsolescence or vandalism, etc.
GASBGASB
Government Accounting Standards Board
GAAPGAAP
Generally Accepted Accounting Principles
Historical Asset CostHistorical Asset Cost
The Historic Asset Cost represents the original
amount at which the fixed asset was acquired. This amount is inclusive
of subsequent acquisitions, betterments, and increase/decrease adjustments.
It does not include depreciation and disposition. The amount is provided
as information to show the original, gross cost of the asset.
In Service DateIn Service Date
The In Service Date specifies the date the
asset entered into service. Depreciation can begin on this date or
the Acquisition Date, which date is determined by the asset type.
Memo AssetMemo Asset
Assets may be tracked as part of the asset
inventory without any accounting impact with an indication that it
is a Memo Asset. Memo Assets are often used to record assets that
do not meet capitalization threshold requirements but should or must
be tracked.
Net Book ValueNet Book Value
Net Book value is the difference between
the historical asset and accumulated depreciation.
ReorganizationReorganization
A term used for the type of asset modification
where the location, custodian, responsible employee are updated.
Useful LifeUseful Life
The useful life of an asset is the estimated
life, expressed in years, over which the asset will decrease with
use or time to the point of equaling the salvage value, which could
be zero.
ValuationValuation
An optional asset management tool is to maintain
the current value of an asset, or valuation. When this amount is updated
manually or by an application process, the term is revaluation.