Each governmental entity should have an inventory of assets. In addition to complying with auditing standards, an inventory may help determine the extent of loss if a break-in occurs and may also help detect employee thefts.
To develop and maintain an asset inventory system, we recommend that public entities:
- Set a minimum dollar value for assets that will be included on the asset inventory list(s).
- Assign actual or historical costs to each item.
- Create an inventory of all assets above the minimum dollar amount.
- Assign the responsibility for knowing the location of each asset to a department head or official.
- Label each asset with identifying information, such as the name of the public entity and a unique asset number.
- Record the disposal of assets, and the acquiring of new assets.
- Keep your asset inventories current by conducting physical inventory inspections on a regular basis.
For “capital assets” as defined by GASB Statement 34:
- Identify and record capital asset information in your accounting system;
- Determine the useful life for various classes of assets to be used for depreciation purposes; and
- Create general ledger account codes to record capital asset transactions.
More information on inventories is found in “A Guide to Local Government Capital Assets,” at:
http://www.osa.state.mn.us/other/GASBTools/capital_asset_guide.pdf.
More information on GASB 34 can be found at:
http://www.osa.state.mn.us/default.aspx?page=gasbimplementation.
Date this Avoiding Pitfall was most recently published: 4/23/2010
