State Of Idaho
Office Of The State Controller
2017 GAAP Closing Procedures Manual

13 Capital Assets In Progress
GL 1810.

.Due Date: July 27

Do not complete this closing package until after year-end close in mid-July.

Complete this closing package if:

Costs incurred for CIP are $50,000 or more for your agency as a whole. Each individual CIP project included should be valued at $5,000 or more and the estimated useful life will be greater than one year.
Your agency reported non-DPW construction with an ending balance in FY16.
Your agency anticipates the total cost of developing an intangible asset will meet or exceed the $200,000 threshold for capitalization and the estimated useful life will be greater than one year. Do not include intangible assets that are created primarily for the purpose of directly obtaining income or profit (please see Investments closing package).

This closing package includes tangible asset construction in progress (CIP) projects (NOT handled by Department of Administration - Public Works) and intangible assets in development projects that your agency expects will result in reportable capital assets when the projects are complete.

PURPOSE

The purpose of this closing package is to gather information regarding capital assets in progress. This information will be used to prepare the State's Comprehensive Annual Financial Report (CAFR).

ACCOUNTING PRINCIPLES AND POLICIES

The State prepares its financial statements in accordance with Generally Accepted Accounting Principles (GAAP). GAAP for capital assets can be found in GASB Codification Sections 1400—Reporting Capital Assets and 2300—Notes to the Financial Statements (paragraphs .117 - .122). Click here for Idaho's FPAC policy on Capital Assets.

GAAP requires the State to report the ending balance of capital assets in progress on the face of the financial statements. In addition, GAAP also requires notes to the financial statements disclose all of the following:

Beginning- and end-of-year balances
Increases during the fiscal year
Decreases during the fiscal year
Commitments to complete capital assets in progress

DEFINITIONS

Ancillary Costs – Costs, in addition to purchase, construction, or development costs, related to placing a capital asset into its intended state of operation. Interest costs to construct or develop a capital asset are considered ancillary costs for enterprise funds but not governmental or internal service funds. These interest expenses are recorded as incurred, not as paid. (Governmental and internal service funds expense construction interest rather than capitalizing it.)

Buildings – Walled and roofed structures plus improvements that are permanently attached. The cost of the building should include all expenditures directly related to the acquisition excluding the land cost. Costs should include purchase price and ancillary costs.

Capital Asset – Constructed buildings, improvements, and other tangible property and developed software, patents, copyrights, and other intangible property that will be used in operations with a life expectancy of greater than one year. Routine repairs and maintenance are excluded.

Commitments – Existing arrangements to enter into future transactions or events, such as long-term contractual obligations with suppliers for future purchases at specified prices and sometimes at specified quantities.

Construction in Progress – Tangible assets which are in the process of being constructed and when completed will qualify as a capital asset. At the time of reporting this type of asset, material and labor costs to construct the asset have been incurred, but the asset is not yet complete. Some construction projects may actually be considered repair or maintenance and therefore may not be capitalized; refer to the Fiscal Policy Manual (Capital Asset Chapter) for guidance.

Intangible Assets in Development – Intangible assets which are in the process of being developed and when completed will qualify as a capital asset. At the time of reporting this type of asset, material and labor costs have been incurred to develop the asset, but the asset is not yet complete. Some development projects may actually be considered repair or maintenance and therefore may not be capitalized; refer to the Fiscal Policy Manual (Capital Asset Chapter) for guidance.

Internally Generated Computer Software – Computer software that is developed in-house by the State's personnel or by a third-party contractor on behalf of the State. Commercially available software that is purchased or licensed by the State and modified using more than minimal incremental effort before being put into operation also should be considered internally generated. For example, licensed financial accounting software that the State modifies to add special reporting capabilities would be considered internally generated.

Internally Generated Computer Software Stages of Development – The activities involved in developing and installing internally generated computer software can be grouped into the following stages:

Preliminary Project Stage - Conceptual formulation and evaluation of alternatives, the determination of the existence of needed technology, and the final selection of alternatives for the development of the software. Outlays associated with these activities should be expensed as incurred.
Application Development Stage - Design of the chosen path, including software configuration and software interfaces, coding, installation to hardware, and testing, including the parallel processing phase. Data conversion should be considered an activity of the application development stage only to the extent it is determined to be necessary to make the computer software operational, that is, in condition for use. Once the recognition criteria have been met, outlays related to these activities should be capitalized. Capitalization of such outlays should cease no later than the point at which the computer software is substantially complete and operational.
Post-Implementation/Operation Stage – Data conversion, application training, and software maintenance. Outlays associated with these activities should be expensed as incurred.

Internally Generated Intangible Assets - Intangible assets are considered internally generated if:

They are created or produced by the State or an entity contracted by the State.
They are acquired from a third party but require more than minimal incremental effort on the part of the State to begin to achieve their expected level of service capacity.

This definition does not include intangible assets that are created primarily for the purpose of directly obtaining income or profit.

Recognition Criteria for Internally Generated Intangible Assets – Outlays incurred related to the development of an internally generated intangible asset that is identifiable should be capitalized only upon the occurrence of all of the following:

Determination of the specific objective of the project and the nature of the service capacity that is expected to be provided by the intangible asset upon the completion of the project
Demonstration of the technical or technological feasibility for completing the project so that the intangible asset will provide its expected service capacity
Demonstration of the current intention, ability, and presence of effort to complete or, in the case of a multiyear project, continue development of the intangible asset

Only outlays incurred subsequent to meeting the above criteria should be capitalized. Outlays incurred prior to meeting those criteria should be expensed as incurred.

Recognition Criteria for Internally Generated Computer Software – When considering capitalizing internally generated computer software, the recognition criteria for internally generated intangible assets (see above) should be considered to be met only when both of the following occur:

Activities in the preliminary project stage are completed.
Management implicitly or explicitly authorizes and commits to funding, at least currently in the case of a multiyear project, the software project.

WORKING PAPERS
Click here for a definition of Working Papers

GENERAL INSTRUCTIONS

If CIP is $50,000 or more for your agency as a whole (each individual project included should be valued at $5,000 or more), complete this closing package.
If an intangible asset in development project is anticipated to meet or exceed the $200,000 threshold for capitalization, complete this closing package.
Internal schedules may be submitted in lieu of completing the Capital Assets in Progress closing package, if they provide all required information. Note: If the beginning balance (last year's ending balance) is incorrect, include a detailed reconciliation of the adjustments to beginning balance.
Round all dollar amounts to the nearest whole dollar.
CLICK HERE FOR SUBMISSION INSTRUCTIONS
Submit the completed closing package by July 27.

COMPLETING THE CAPITAL ASSETS IN PROGRESS CLOSING PACKAGE

Complete the header information.
Enter the Beginning Balance Capital Assets in Progress. This should be the same as the ending balance reported on last year’s closing package.
If the beginning balance (last year's ending balance) is incorrect, enter the amount of the adjustment in the Adjustment to Beginning Balance column. This includes amounts for projects that were previously reported as capital assets in progress but your agency expensed the costs instead of capitalizing them at the end of the project.
Complete the Construction/Development Expenses Incurred column. If any amount in the Fiscal Year 2017 Construction/Development Expenses Incurred column is attributable to personnel costs (expenditure subobject series 4000) or operating expenses (expenditure subobject series 5000) for internally generated intangible assets, put amounts in the corresponding columns and specify the expenditure subobject in the Comments box or attach the information below. This should include related accounts payable and other payables that will be reported on the Fiscal Year 2017 closing package 16 Accounts Payable and Other Payables (for all funds), as well as interest incurred (for enterprise funds).
Complete the Project Completed and Reclassified as a Capital Asset column. This should be the total cost of the finished projects(s).
Complete the Ending Balance Capital Assets in Progress column. This amount is the beginning balance plus adjustments to beginning balance plus the current year expenses incurred less the completed projects.
Complete the Projected Remaining Costs to Complete Project column. This amount should be the remaining amount on construction contracts for which you are committed (see Commitments definition), plus encumbered amounts.
If any completed projects reported were transferred or sold to another fund, state agency, or discretely presented component unit, please provide the following information about the transaction in the Comments box or in an attachment below:
- The receiving fund number, name of the other state agency, or the name of the discretely presented component unit
- The completed project cost
- Any proceeds received
- Any gain or loss (do not net)

13 Capital Assets in Progress
GL 1810

Due Date: July 27

At June 30, 2017
At June 30, 2017
Agency Code: 000	Name of Agency: Agency		Current Status: Temporary
Fund Number:	Name of Fund:
Prepared by (Originator):	Job Title:	Phone:	Date:
Approved by (Approver):	Job Title:	Phone:	Date:
Select here if this is a continuation of an already submitted Closing Package:

		Fiscal year 2017 Construction/Development expenses incurred - Please split expenses according to the Expenditure Subobjects used to pay them.
Beginning Balance Capital Assets in Progress (+)	Adjustment to Beginning Balance (Prior Year) (+/-)	Capital Outlay (Exp Subobject Series 6000) (+)	Operating Expenses (Exp Subobject Series 5000) (+)	Personnel Costs (Exp Subobject Series 4000) for Internally Generated Intangible Assets (+)	Project Completed in Fiscal Year 2017 and Reclassified as a Capital Asset (-)	Ending Balance Capital Assets in Progress (=)	Projected Remaining Costs to Complete Project

Attach a reconciliation of amounts reported in the Adjustment to Beginning Balance column.
Please specify the expenditure subobject with corresponding amount for amounts shown in the Operating and Personnel costs columns above.
If any completed projects reported were transferred or sold to another fund, state agency, or discretely presented component unit, please provide the following information about the transaction in the Comments box or in an attachment below:

The receiving fund number, name of the other state agency, or the name of the discretely presented component unit
The completed project cost
Any proceeds received
Any gain or loss (do not net)

Comments

(For help with attaching documentation, please refer to the

Submission Instructions

)

Timestamp	Audit Trail
05/14/2025 01:09:02 AM	Anonymous - Created