BOP Program Statement 8563.07 § 11

a. Warehouse personnel are to record receiving a fixed asset

as a Goods Receipt/Invoice Receipt (GR/IR) transaction, thereby

creating a debit to the M&E - Operational account(175100) and a

credit to the Accounts Payable - GR/IR account (232100). Care

must be taken to ensure that the equipment number in the Assets

Shell corresponds to the equipment tag number recorded in

Millennium.

b. All fixed asset shell records are to be separated into the

following seven classifications:

PS 8563.07

6/13/2001

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Class Code Description Account

1000 Building & Improvements 173000

2000 Machinery & Equipment 175100

2500 Assets Under Capital Lease 181000

3000 Non-capitalized Equipment N/A

4000 Assets Under Construction 172000

5000 Donated B&I 173000

5100 Donated Machinery & Equipment 175100

c. Idle equipment is to be tagged as “idle,” and noted on the

Master Assets Record evaluation group.

d. Receipt of donated M&E is to be documented on a Report of

Survey after valuation by an AW(I&E)/SOI-appointed Board of

Survey. The Business Manager is to establish a fixed assets

shell for donated property based upon the Report of Survey’s

approval.

• Upon receipt of donated property, the accountant is to

debit the asset number. The Millennium system debits

the M&E - Operational account (175100) and credits the

Donated Property - Current Year account (322000).

• The donated M&E is to be depreciated in the same way as

any other asset.

• The accountant is to recapture the depreciation

expenses on the donated M&E via a manual journal entry

by debiting the Donated Property - Current Year account

(322000) and crediting the Recapture of Donated

Property account (713000).

Note: Field locations may need to contact the

Financial Manager in FMB in order to affect

the 322000 account.

• At fiscal year end, the Corporate Accountant in Central

Office is to prepare a manual journal entry

transferring the amounts in the Donated Property -

Current Year account (322000) to the Donated Property -

Prior Years account (322500).

• If FPI subsequently donates the donated M&E to a

non-FPI activity, the transaction is to be recorded via

a manual journal entry by debiting the appropriate

Donated Property account and the Accumulated

Depreciation account (175900) and crediting the M&E -

Operational account (175100).

PS 8563.07

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• The accountant is to record acquisition of Donated M&E

on the Master Assets Record using the class code 5100.

e. Whenever a piece of equipment becomes idle, the employee

responsible for that equipment must notify the Business Manager

in writing. The Business Manager must ensure that the evaluation

group is noted as idle in the Fixed Assets Record.

f. A capitalized asset acquired by a lease, in general, is to

be capitalized at the amount represented by the present value of

the future lease payments, including any payment called for by a

bargain purchase option; the Capital Lease Liability account

(294000) is to be credited for this amount.

Executory costs such as maintenance or profit charged are not

to be included in the capitalized amount. As periodic payments

are made, executory costs and interest are to be charged to

expense and the Capital Lease Liability account is debited.