BOP Program Statement 8563.09 § 9

the Fair Market Value (FMV) as determined by a Board of Survey

when acquired or, if applicable, after renovations/improvements

have been made. B&I on loan to FPI are not considered donated

property.

— The accountant is to enter the donated B&I into the

Master Asset Record at the valued amount. The class

code field is 5000.

— Renovations costing $10,000 or more are to be

capitalized separately from the donated B&I’s FMV. The

donated B&I’s FMV is determined by subtracting the

renovation costs from the building’s FMV after

renovation. The two values are entered into the Master

Asset Record as two separate assets referencing the

other. Each asset record must be depreciated based on

the asset’s capitalized value and useful life.

Example: B&I with a renovated FMV of $40,000,

renovation costs of $15,000, and a 10 year

useful life would have two asset entries in

the Master Asset Record. One asset entry

would be for renovation costs in the amount

of $15,000 to be depreciated over 10 years.

The other entry would be for the FMV of

donated B&I in the amount of $25,000 ($40,000

- $15,000), also to be depreciated over 10

years.

— Depreciation expenses must be recaptured on Donated B&I

by debiting account 322000 - Donated Property - Current

Year, and crediting account 713000 - Recapture of

Donated Property for the Donated FMV of B&I.

Depreciation of renovation costs are not recaptured

since they are actual B&I expenditures depreciated over

the asset’s life.

PS 8563.09

7/23/2002

Page 5

— At fiscal year end, amounts in account 322000, Donated

Property - Current Year, must be transferred centrally

to account 322500, Donated Property - Prior Years by

crediting account 322000 and debiting account 322500.

Depreciation expenses then must be recaptured locally

on this B&I by debiting account 322500 instead of

322000.

— If FPI subsequently donates Donated B&I to a non-FPI

activity, the transaction must be recorded by debiting

account 322000 Current Year or 322500 Prior year

Donated Property and account 173900, Accumulated

Depreciation, and crediting account 173000, B&I.

Renovation costs for donated B&I is to be recorded in

accordance with procedures for other B&I.

— Acquisition of donated property must be approved in

accordance with Section 7 of this Program Statement.