| (C) A state agency that conducts a market study shall
fully document the methods used to conduct the study. The agency shall
keep the documentation in the agency's records in accordance with
the comptroller's requirements. The agency shall send a copy of the
documentation to the state property accounting system.
(4) Personal property manufactured by the state. The
value of personal property manufactured by the state must be equal
to the total cost of labor and materials. Overhead costs may be included
in the value if the manufacturing state agency determines it would
be cost-effective.
(5) Betterments and replacements of personal property.
(A) A state agency shall determine the value of a betterment
or replacement of personal property:
(i) immediately following the completion of the betterment
or replacement; or
(ii) at the agency's earliest opportunity as deemed
appropriate by the agency and the comptroller.
(B) The value of a betterment of personal property
must be expensed unless the betterment increases the value or useful
life of the property by a material amount. If a betterment is not
expensed, then the value of the property must be increased on the
state property accounting system in accordance with the comptroller's
requirements.
(C) The value of a replacement of personal property
is equal to the cost of the replacement less the original cost of
the part being replaced. The value of the replacement must be expensed
unless the replacement materially increases the value or estimated
useful life of the property. If a replacement is not expensed, then
the value of the property must be increased on the state property
accounting system in accordance with the comptroller's requirements.
(D) If a state agency is required to increase the value
of personal property on the state property accounting system because
of a betterment or replacement, then the agency shall keep documentation
in its records that supports the amount of the increase. The agency
shall make the documentation available for inspection upon request.
The agency may destroy the documentation only in accordance with the
comptroller's requirements.
(6) Debt-financed personal property.
(A) In this paragraph, the total principal of debt-financed
personal property is equal to the purchase price of the property plus
the applicable service charge imposed by the Texas Public Finance
Authority.
(B) The acquisition cost of debt-financed personal
property other than manufactured items must reflect the total principal
of the property and the costs required to place the property into
service.
(C) The acquisition cost of debt-financed personal
property that has been manufactured should be equal to the total cost
of acquiring the property plus the cost of placing the property into
service. This includes the principal, interest, finance charges, costs
of issuance, and administrative fees.
(7) Leased personal property.
(A) Personal property that a state agency has leased
under a capital lease must be valued in accordance with this paragraph.
(B) Subject to subparagraph (C) of this paragraph,
the cost of leased personal property is equal to the present value
of the minimum lease payments plus the cost of placing the property
into service. The cost of the property does not include any costs
not paid by the agency.
(C) The cost of leased personal property may not exceed
the property's fair market value.
(8) Trade-ins. If a state agency is authorized to trade
personal property for other personal property, then the agency must
report the trade to the state property accounting system in accordance
with the comptroller's requirements.
(9) Condition of personal property. When a state agency
reports surplus or salvage personal property to the state property
accounting system, the agency must include the condition of the property
in the report. The agency should use the categories adopted by the
comptroller when reporting the condition of personal property.
(10) Previously depreciated personal property. If a
state agency obtains ownership of personal property that was previously
purchased with federal funds and depreciated for federal reporting
purposes, then the agency shall value the property at its original
cost. The previous depreciation has no effect on the value of the
personal property for the purposes of the state property accounting
system.
(j) Accounting practices.
(1) Depreciation of personal property.
(A) The depreciable personal property of proprietary
and fiduciary funds must be depreciated in accordance with generally
accepted accounting principles.
(B) An internal state agency shall depreciate personal
property that is a general fixed asset by using the straight-line
method. The depreciation must be recorded on the state property accounting
system on a memorandum basis unless generally accepted accounting
principles require depreciation. Regardless of how the depreciation
is recorded, it shall be recorded at the end of each fiscal year unless
the comptroller specifies otherwise.
(C) The amount that personal property depreciates over
a fiscal year by using the straight-line method is equal to the difference
between the property's acquisition cost and its salvage value; divided
by the estimated useful life of the property expressed in months.
(D) A state agency shall use the state property accounting
system's default value for the estimated useful life of personal property
unless the agency documents a different value based on the agency's
experience. This subparagraph applies only when a state agency is
calculating depreciation for the purpose of recording it on the state
property accounting system.
(2) Transfer of personal property between funds.
(A) If a state agency transfers personal property from
a proprietary fund to a governmental fund, then a new cost basis must
be established for the property in the governmental fund. The new
cost basis must be based on the acquisition cost of the property as
recorded in the proprietary fund less any accumulated depreciation
earned on the property. There is no requirement for the agency to
modify the estimated useful life of the property.
(B) If a state agency transfers personal property from
a governmental fund to a proprietary or fiduciary fund, then the acquisition
cost of the property must be recorded in the proprietary or fiduciary
fund. The acquisition cost as recorded in the proprietary or fiduciary
fund must be equal to the acquisition cost as recorded in the governmental
fund. The estimated useful life of the property must be adjusted to
reflect the best estimate of useful life available to the proprietary
or fiduciary fund.
(C) If a state agency transfers personal property from
a governmental fund to another governmental fund, then the acquisition
cost of the property as recorded in the new fund must be the same
as the cost recorded in the old fund.
(3) Reporting and reconciliation of personal property
inventory balances.
(A) A state agency shall:
(i) report to the state property accounting system
general ledger information using generally accepted accounting principles;
(ii) track beginning balances at the beginning of each
year; and
(iii) report additions, deletions, and adjustments
in personal property throughout the year so that year end balances
can be determined.
(B) An internal state agency should reconcile its general
ledger balances for personal property to the supporting financial
detail in the state property accounting system. The agency should
accomplish the reconciliation on a monthly basis at the month-end
closing. All adjustments made during the reconciliation should be
supported and documented. The agency may destroy the documentation
only in accordance with the comptroller's requirements.
(C) A reporting state agency should reconcile its corresponding
balances to the detail reported to the state property accounting system
on a quarterly basis. Adjustments should be entered not later than
the 20th day after the end of the quarter. All adjustments should
be supported and documented. The agency may destroy the documentation
only in accordance with the comptroller's requirements.
(k) Maintaining records.
(1) Forms. A state agency shall use the forms prescribed
by the comptroller when taking any action authorized or required by
this section. The comptroller may adopt and modify forms as the comptroller
deems necessary.
(2) Loans of personal property.
(A) A state agency may loan personal property to another
state agency only if the head of the agency lending the property provides
written authorization for the lending. The head of the agency to which
the property is lent must execute a written receipt.
Cont'd... |
