Corresponding Policy: See ‘
...
Fixed Asset Library Accounting’ policy.
Corresponding Forms: N/A
Process: Seeking Help on the Accounting for Special Library Collections
Additions
Although the unit price of a special collection volume may be less than the PSU capitalization threshold, the total cost of the entire special collection far exceeds the threshold. Therefore, all additions to library special collections are capitalized regardless of amount in the Net Investment In Plant fund 890000. For practical purposes, Banner Fixed Assets is not to be used to separately track the acquisition, and disposal of each special collection volume. Instead, Banner Fixed Assets has one fixed asset record for each special collection, or group of special collections. It is generally desirable (but not required) to have a separate record for each separately identifiable special collection. The sum of the library special collection asset records' adjusted cost is to reflect the total historical cost of the library special collections on hand (net of withdrawals) at the end of a fiscal year. (Library special collections do not depreciate.)
At the end of each fiscal year, any additions to library special collections need to be accounted for in the Banner Fixed Assets system and the General Ledger. The value of the additions is to be obtained from the 'Special Collection Historical Cost' section of the 'Annual Library Valuation Report' and includes values for expenditures recorded using account code 40190 'Library Purchases' (across fund types) as well as FMV of in-kind gifts
Additions to existing special collections are processed against the existing special collection records using a Banner Fixed Assets write up (WRIT) function of the Fixed Asset Adjustment form (FFAADJF). Additions of new special collections may be added in the same manner to existing special collection records via a write up or may be added to Banner Fixed Assets as separate records. Additions of new special collections added as separate records are to be created using the 'New Tag, Non-Procurement' action type and asset type NA 'NonExp-Art/Exceptional' in the Fixed Asset Master Maintenance form (FFAMAST).
New special collection records are then to be capitalized on the General Ledger to the fiscal year just ending, using the Banner Fixed Assets 'Ptag capitalization' (SCAP) function of the Fixed Asset Adjustment form (FFAADJF). The resulting capitalization entry debits the asset account A8033 'Library Special Collections' and credits the equity account E1001 'NIP Change in Fixed Assets'.
Revenue Recognition of Donations
Revenue is to be recognized for library special collection donations received during the fiscal year and is to be recorded against the Net Investment In Plant fund 890000. A journal entry is to be recorded at fiscal year-end after the associated capitalization has occurred. The journal entry should credit the appropriate revenue account in the 036xx account series and debit the equity account E1001 'NIP Change In Fixed Assets' in fund 890000. (The debit to the equity account offsets the donation portion of the equity credit that occurs during the capitalization of additions.)
Deductions
Volumes are removed from the special collection periodically based on PSU library policy. Volumes that are withdrawn during the fiscal year are to be aged and valued at their historical cost and the total special collection values adjusted accordingly at the end of the fiscal year. For example, if in a fiscal year the library had withdrawals of $150,000 worth of special collection volumes, the year-end accounting entry would be to reduce the fixed asset adjusted cost of the associated library special collection record(s) by $150,000 using a Fixed Asset write down (WRIT) adjustment.
Insurance, Replacement Values
Insurance and replacement values are to be adjusted annually based on the 'Special Collection Replacement Cost' section of the 'Annual Library Valuation Report'. The replacement values are established each year by the Inter-Institutional Library Council. These values are to be adjusted at fiscal year-end only after the FWRFAAX 'Fixed Assets - Inflation Factor' program has run and after all other library special collection adjustments have been performed.
The insurance and replacement values of each library special collection fixed asset tag is to be set to the prorated value of the total special collections replacement cost per the annual library valuation report. The proration is to be based on total adjusted cost of the special collection records. The update is performed via the Banner Fixed Assets 'Permanent Tag - Update Asset' action in the Fixed Asset Master maintenance form (FFAMAST). For example, if in FY '03 the total special collection replacement cost per the annual valuation report is $10,000,000 and the sum of the total adjusted cost of all library special collection records is $8,000,000, the insurance and replacement values of each individual special collection record should be set to 125% of the individual records adjusted cost. The formula is: individual record's insurance & replacement cost = (individual records adjusted cost / sum of all special collection record's adjusted cost) X total replacement cost. Restated it is: Individual record's insurance & replacement cost = individual records adjusted cost X (total replacement cost / sum of all special collection record's adjusted cost). In the example, individual records adjusted cost X ($10,000,000 / $8,000,000) or 1.25 or 125% of the individual records adjusted cost.