Difference Between Fixed & Movable Assets | Accounting

Fixed Equipment

Fixed equipment are assets which are usually attached and integral to the building’s function, although it might have a shorter life than that of the building. Building services equipment, such as heating, ventilation, air-conditioning, elevators, plumbing, and sprinkler systems are also included in the fixed equipment category. Basically, items which are stand alone and are not associated with any particular department but are associated with the building as a whole are considered fixed assets.

In addition to assets inside a building, buildings, capitalized land, land improvements and some construction projects are also considered fixed equipment. Assets that are under renovation or construction are capitalized if the total cost is $100,000 or 20% of the building.

Movable Assets

Movable assets include items that are not necessarily part of the building itself. Movable assets have an asset purchase cost of $5,000 or greater per unit and depreciate monthly for the life of the asset.

1. Tagging

A metal tag with Duke University's logo is applied to movable assets. The tag displays a control number which was created at the time the asset was created in SAP. This tag is used for identification purposes. Even items that cannot physically carry a metal tag have an assigned number.

Plant Accounting began taking digital pictures of capital equipment in 1997. If you would like a picture of an asset, e-mail your request to Plant Accounting.

2. Inventory

Conducting capital equipment inventories is vital in monitoring and controlling Duke University and Duke University Health System’s capital equipment. Physical inventories are conducted on a department-by-department basis for all assets with a unit cost of $5,000 or greater. Equipment is inventoried in a perpetual cycle, with the oldest equipment inventory being the next one done. Equipment should be inventoried at least once every two years as per OMB Circular A-21 Section J, 12, e, which states, in part:

“Charges for use allowances or depreciation must be supported by adequate property records, and physical inventories must be taken at least once every two years to ensure that the assets exist and are usable, used, and needed.”

In order to this maintain the cycle, a control log is kept on the Plant Accounting server for milestones to be updated as the inventory progresses. The four basic milestones are:

1. Starting the inventory
2. Listing the assets for the inventory
3. Lost list sent to the Property Officer
4. Final letter sent to the Property Officer

For more information, refer to GAP 200.040, Plant & Equipment Definitions, General Principles & Controls or GAP 200.050, Plant & Equipment Capitalization. For more information regarding depreciation, refer to GAP 200.090, Plant & Equipment Depreciation.