| VOLUME: I |
POLICIES RELATED TO ACCOUNTING ADMINISTRATION |
| SUBJECT: |
Capitalization of Software |
| SOURCE: |
Financial Management Services, American Institute of Certified Public Accountants (AICPA) Guidelines for Colleges and Universities, GAAP
|
| DATE ISSUED: |
July 1992, Revised July 2002 |
| POLICY NO.: |
I-160 |
| RATIONALE: |
To define what items will be classified as capital software. |
| POLICY: |
Application software shall be capitalized as a separate asset if the acquisition value is Five Thousand Dollars ($5,000)
or more and has a life of greater than one year.
Operating software purchased with a computer package will be capitalized as part of the initial cost of the computer.
|
| DEFINITIONS: |
Application software are canned programs that offer special functions, i.e. Harvard Graphics, LAN based user packages.
A computer package is a purchase of the main computer central processing unit and could include a monitor, keyboard, and mouse.
|
| PROCEDURE REFERENCE: |
For software to be secured as capital, the correct object code should be utilized on the purchase order and other financial transactions. A list of the current object codes (income and expense classes) is available by contacting your Campus Chart Manager (see listing; http://www.fms.indiana.edu/) or the Financial Information System object code reference tables.
|
| CROSS REFERENCE: |
For more detail and definition on this policy, refer to the Indiana University Capital Asset Manual, Accounting for Assets at Indiana University,
URL: http://www.fms.indiana.edu/Manual/Manual.asp distributed by the Financial Management Services department.
See Accounting Administration Policy I-150, Capitalization of Moveable Equipment.
|
| RESPONSIBLE ORGANIZATION: |
Financial Management Services |
