PURPOSE AND DEFINITION OF PROPERTY ACCOUNTING - TERMS AND DEFINITIONS - 8600.1

(New: 10/2020)

Capital Assets/Property: may be capitalized or non-capitalized. The term capital assets/property is used interchangeably in SAM Chapter 8600 and includes all tangible and intangible assets.

Capitalized Asset: is a capital asset whose estimated useful life and cost to acquire, construct, or improve exceeds a predetermined amount (capitalization threshold). The accounting and reporting for capitalized assets using the economic resources measurement focus and the accrual basis of accounting require that costs are not recognized immediately as an expense when incurred. Instead, costs are capitalized (deferred) and allocated over the estimated useful life of the capital asset in the form of depreciation or amortization expense.

Capitalization Threshold: the state’s policy that identifies the estimated useful life, cost requirement, and use a capital asset must meet in order to be capitalized.

Legacy: refers to Uniform Codes Manual accounts or reporting processes that came before the state’s transition to the Financial Information System for California (FI$Cal).

Non-Capitalized Asset: assets whose cost to acquire, construct, or improve is below the capitalization threshold.

Personal Property: are tangible capital assets/property that are moveable, unlike land or buildings. Examples include equipment, vehicles, computers, etc. SAM section 8634 includes intangible assets not related to land and liquid monetary assets such as cash in this definition to administer gifts received by the state.

Property: see Capital Assets/Property above.

Property Register: an inventory listing of all property, both capitalized and non-capitalized. The property register will contain the description and cost for each item of property, details of depreciation or amortization expense and accumulated depreciation or amortization.

Real Property: are tangible capital assets/property that are fixed, principally land, and buildings. Examples include land, buildings, roads, and other infrastructure. SAM section 8634 includes intangible assets related to land in this definition to administer gifts received by the state.