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Method 2 for Depreciating Libraries with Class Code 752 Items

FPP N.006

Step Action
1 Reduce the library's total value by the value of items that will remain under Class Code 752:
  1. Identify all items that will remain as Class Code 752 items after this conversion. Compute their total historical value.
  2. Compute the adjustment amount needed for step 1c:

    (library’s total value) – (total historical value of Class Code 752 items)
    = adjustment amount

  3. Access the existing library property number in SPA. Decrease the appropriate components by fund and DEFY by the adjustment amount calculated in step 1b. Perform multiple decrease transactions if necessary.
2 Change the class code on each component to 751.

Note: There will not be continuity between the FY04 ending balance and the FY05 beginning balance. On the SPA CAAB101 report, the beginning balance will now appear in the Depreciable Assets section on the line item, Other Capital Assets. The decreases will appear in the adjustment column. Also, the class code changes will not auto-update the depreciable indicator.
3 Establish a new library property number with:
  • Class Code 752 (non-depreciable)
  • Component 01 with a value equal to the total value of all prior years excluding FY05 and with an effective date of 9/1/2004
  • Component 02 with a value equal to the total value of FY05 transactions (if there are any). The effective date should reflect the original purchase dates.
4 After establishing the new property number and components, contact your SPA analyst, who will change the DEPR ENTITY FY on Component 01.
5 When you prepare your Capital Asset note at year-end, make manual adjustments on the SPA CAAB101 report to ensure that:
  1. in the Non-Depreciable Assets section, line item Other Assets:
    • the beginning balance equals the amount specified in the Financial Reporting Section’s reporting requirements.
    • the adjustment column shows a decrease equal to the total amount reclassified to Class Code 751 in step 2. This should be a negative amount.
    • the additions column equals FY05 purchases only.
    • the deletions column equals FY05 deletions only.
  2. in the Depreciable Assets section, line item Other Assets:
    • the beginning balance equals zero (if there were no other assets in this category).
    • the adjustment column equals the total amount reclassified to Class Code 751 in step 2. This should be a positive amount.
6 On the SPA CAAB201, report ensure that the line item Other Assets:
  • has a beginning balance equal to zero (if there were no other assets in this category).
  • the adjustment column equals the depreciation expense for all prior fiscal years.
  • the additions column equals FY05 depreciation expense only.
  • the deletions column equals FY05 deletions only.