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Each governmental entity should have an inventory of assets. In addition to complying with auditing standards, an inventory may help determine the extent of loss if a break-in occurs and may also help detect employee thefts.

To develop and maintain an asset inventory system, we recommend that public entities:

  • Set a minimum dollar value for assets that will be included on the asset inventory list(s);
  • Assign actual or historical costs to each item;
  • Create an inventory of all assets above the minimum dollar amount;
  • Assign the responsibility for knowing the location of each asset to a department head or official;
  • Label each asset with identifying information, such as the name of the public entity and a unique asset number;
  • Record the disposal of assets, and the acquiring of new assets; and
  • Keep your asset inventories current by conducting physical inventory inspections on a regular basis.

For “capital assets” as defined by GASB Statement 34:

  • Identify and record capital asset information in your accounting system;
  • Determine the useful life for various classes of assets to be used for depreciation purposes; and
  • Create general ledger account codes to record capital asset transactions.

More information on inventories is found in “A Guide to Local Government Capital Assets,” at:

http://www.osa.state.mn.us/other/GASBTools/capital_asset_guide.pdf.

More information on GASB 34 can be found at:

http://www.osa.state.mn.us/default.aspx?page=gasbimplementation.


Date this Avoiding Pitfall was most recently published: 8/23/2013

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