A fixed asset is an asset with a useful life of more than one year which is not consumed. An asset of an organization is classified as a Fixed Asset for accounting purposes when it:
- Is intended for internal use (i.e., is not for resale)
- Has a useful life extending beyond at least the fiscal year in which it was acquired, and
- Has a monetary value of $500.00 or more
The Commonwealth acquires real property as well as equipment, machinery, historical treasures, vehicles, software and other intangibles. These fixed assets are acquired through purchase, lease, donation, grants, and transfers from other state agencies. Per FAP 120-20-01, Each budget unit shall maintain a current fixed asset record of equipment meeting the definition of a fixed asset above.
- In accordance with KRS 45.313, the FAC may conduct physical audits of fixed asset records; therefore, inventory records shall be made available to the FAC at any time.
- Agencies shall enter records into the fixed asset system for non-expendable property that promotes financial reporting, safeguarding of assets and adequate insurance.
- Expendable property shall be accounted for using the statewide inventory control system or another previously approved internal method of accounting for the flow of expendable property.