Establishing a Capital Asset Accounting System

In most small and medium-size cities, establishing a Capital Asset Accounting System (CAAS) is not a major undertaking. However, planning, direction and cooperation are needed to achieve satisfactory results.

The following steps are suggested to establish the initial capital asset record:

• Assign responsibility to an individual the task and authority for establishing capital asset records.
• Conduct an initial physical inventory and collect identifying information, such as description, assigned department, location, model number, serial number, manufacturer, size, and other relevant characteristics.
• Determine the recorded cost using historical cost records when available. If historical cost cannot be determined, reasonable estimates may be used, with supporting documentation retained.
• Maintain asset records electronically or in another appropriate format, including information needed for financial reporting and depreciation.
• Identify and track assets using asset tags, identification numbers, or other appropriate methods
• Establish procedures to update records for acquisitions, transfers, improvements, and disposals.