1. During a physical inventory an organization may find capital assets that are not presented on the inventory report.
2. When an asset was retired in error.

1. During a physical inventory an organization may find capital assets that are not presented on the inventory report.



If the "found" asset was acquired by a gift from an external institution please refer to CSOP 7.0, IU Gifts.

If the "found" asset was acquired as a transfer-in from another institution, please refer to CSOP 40.0, Transfer-in Capital Assets.

1. For equipment purchased in the current fiscal year a general error correction document(GEC) should be issued by the organization to correct the object code. The GEC will result in the creation of the capital asset.

For information on how to issue a general error correction please reference the Using Movable Capital Equipment Object Codes in the Financial Documents training document at the following url: http://www.fms.indiana.edu/fis/documentation/movable_object.pdf.

2. Prior year. Assets that were expensed incorrectly in a prior fiscal year will not be corrected. Prior year "found" assets will only be re-created by the University Capital Asset Office when the cost of the asset is material to the university. Prior year "found" assets should be reported to the University Capital Asset Office at fmscams@indiana.edu. The University Capital Asset Office will research the asset to determine if a found asset should be created.
2. When an asset was retired in error.



If the asset was depreciating and retired in error the asset will only be re-created when the net book value is equal to or greater than the capitalization threshold of five thousand dollars.

Assets retired in error should be reported to the University Capital Asset Office at fmscams@indiana.edu.

The accounting entries are then created based on the financial information entered into the payment section of the add asset document. The account will see offsetting entries to the expense object code 7701 and to expense object code 4997 capital asset adjustment. The entries offset, having no effect on Cash or Fund Balance.

Transaction entered on the add an asset document:

Account Number	Object Code	Description	DR	CR
12-700-00	7701	Found Capital Equipment	6,500

Transaction Generated by the add an asset document:

Account Number	Object Code	Description	DR	CR
12-700-00	4997	Capital Asset Adjustment		6,500

Capitalization Process:

Account Number	Object Code	Description	DR	CR
95-700-74	8610	Capital Equipment	6,500
95-700-74	9899	Fund Balance		6,500

The only information supplied on the add asset document in this example was Account 1270000, Object Code 7701 and a Net Book Value of $6,500.00. The remaining entries were generated by the add asset document and the Capitalization Process.

Equipment. The term "equipment" includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.

Found capital assets are those assets that were retired in error, or incorrectly coded as non-capital in a prior fiscal year.