0100 Accounting and Financial Reporting

State agencies should assess their capital assets at least annually to determine if they have any impaired capital assets with material carrying values. OSC will request information relating to capital asset impairments in the year-end Annual Comprehensive Financial Report (ACFR) package. Based on the information provided, OSC will determine if the impairment needs to be recognized in the State’s ACFR. OSC will calculate any impairment losses and will make entries in NCAS (or will provide entries to agencies) to report any such losses. In addition, OSC will notify state agencies of the adjustment amount that should be recorded in the fixed asset system to reduce the carrying value of impaired capital assets. State agencies should post these adjustments to the fixed asset system during the next fiscal year as a prior period adjustment.

Capital assets should not be revalued when transferred between funds and/or component units of the State’s financial reporting entity. In these circumstances, the transferee should recognize the capital assets at the transferor’s carrying value. These intra-entity transfers include donations or purchases/sales of capital assets between any combination of the funds and/or component units of the State’s financial reporting entity including State agencies, universities, community colleges, and all other component units of the State.

Except as discussed below, works of art, historical treasures, and similar assets should be capitalized at their historical cost or acquisition value at the date of donation (assets donated prior to July 1, 2015 are recorded at their estimated fair value at the date of donation) whether they are held as individual items or in a collection.

Buildings are structures that are permanent in nature and have an asset life of two or more years. They are subject to depreciation.

Additions are considered separate assets and should be capitalized if the cost equals or exceeds the $5,000 capitalization threshold. An addition increases the physical size or operating capabilities of an asset through expansion or extension.

These inventories consist of general supplies and materials. Where inventories are distributed among several locations, the cumulative total value should be considered in determining materiality. The exception to the foregoing is postage. Because of its liquidity, postage must be recorded when it exceeds $100.00 in value.

Cash and cash equivalents consist of the pooled cash accounts of the State Treasurer and the following items managed by agencies and institutions of the State and its component units: 

• Undeposited receipts 
• Petty cash 
• Checking accounts outside the State Treasurer 
• Time deposits outside the State Treasurer, excluding certificates of deposit, which are considered investments.