Solutions for Your Fixed Asset Inventory

In simple terms, the GASB defines capital assets as “land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. Infrastructure assets are long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems.

In general, governments are required to report capital assets at their historical cost and to depreciate that historical cost in a systematic and rational manner over the estimated useful lives of the assets. Capital assets are reported at their historical cost net of accumulated depreciation in financial statements using the economic resources measurement focus and the accrual basis of accounting.”1

Public entities are expected to maintain an accurate accounting of their fixed assets, but having the time, resources, and experience for the task can be challenging. CBIZ Valuation Group provides public entities with comprehensive fixed asset inventory solutions.

Priorities

As a public entity, you have larger priorities to focus on besides fixed assets. CBIZ Valuation Group can do an initial inventory of your fixed assets and tie it back to your financial statements.

Headcount

Unless you’re a large public entity, it likely does not make sense to increase your headcount and bring on a full-time employee to administer fixed asset reporting. CBIZ Valuation Group can perform this service for a fraction of the cost. After our initial engagement, we recommend using our updating service, typically under $2,000 per year.

Experience

Another benefit of outsourcing vs. insourcing is that when you assign staff to handle the fixed assets, they’re not given clear instructions, and they often don’t have the experience to conduct the reporting correctly. The CBIZ Tangible Asset Practice has the knowledge and skillset to step in and help.

Capitalization Thresholds

Many entities still have a low capitalization threshold, such as $1,000. We’ve seen instances where we maintained fixed assets and were able to advise our clients that changing the threshold from $1,000 to $5,000 has a net effect of less than 5% on their financials . More than likely, your auditor won’t have an issue raising your threshold.

Proficiency Matters

The CBIZ Tangible Asset Practice has provided these services for more than 45 years. Our team of skilled consultants, in combination with our efficient technology, will successfully manage your fixed asset records. When you work with us, we’re part of your team. When we get a worksheet back, if something doesn't appear correct, we’ll let you know so the problem can be resolved. Bells go off when we see several additions and no deletions, additions provided without dates or cost, and the like. We know what to look for to ensure all your assets are properly inventoried.

Click here to download the article and the critical takeaways for successfully managing your fixed assets.

Written by: Peter A. Jakab

1 Governmental Accounting Standards Board Capital Assets, Project Pages, Capital Assets, August 2019