Capital Asset

What is a Capital Asset?

Capital assets, comprising tangible properties, such as land, buildings and equipment, and intangible properties, are identifiable assets that meet all of the following criteria:

  1. Are held for use in the provision of services, for administrative purposes, for production of goods or for the maintenance, repair, development or construction of other capital assets;
  2. Have been acquired, constructed or developed with the intention of being used on a continuing basis;
  3. Are not intended for sale in the ordinary course of operations; and
  4. Are not held as part of a collection

At the University of Toronto, all purchases that fall under the above definition and have a life expectancy greater than one year and a value of $5,000 or more (excluding related costs, e.g., freight and taxes) are considered capital assets. This definition is applicable regardless of whether the purchase was funded by operating, ancillary, capital or restricted funds.

Departments are required to record and track capital asset purchases at or above the $5,000 threshold. Divisions can have a different threshold for tracking capital assets as long as this threshold does not exceed $5,000. For instance, laptop computers generally can be purchased for less than $5,000, yet control of this asset should not be ignored because it may fall beneath the University threshold for recording of capital assets.

Departmental Capital Asset Records

The University currently does not maintain capital asset listings centrally. Departments are required to maintain a record, or inventory, of capital assets to facilitate management and audit requirements.

As a minimum, capital asset records should identify the cost and location of all assets owned by the University, and those held in trust. The following information relating to the purchase of capital assets should be captured by the department:

  • FIS document number
  • department, i.e., the custodial department
  • room number, if applicable
  • quantity
  • source of funds:
    • commitment fund centre
    • fund
  • unit cost
  • total cost
  • description
  • model # where included on the invoice
  • serial # where included on the invoice
  • Operation Property ID number, if applicable
  • STOP Theft plate number, if applicable

This information is essential to managing the optimal use of available assets within a business unit, and may be the key to identifying and verifying theft.

A department should consider the Operation Property ID program for engraving high-risk items. It is operated by the University of Toronto Police, 978-2323. In addition, the department should consider attaching serialized plates to devices being protected, as part of the STOP Theft program.

Disposal of Capital Assets

Disposals refer to capital assets where title has been transferred to a party outside the University by way of sale, trade in or gift, or removed from service due to obsolescence, scrapping or dismantling. Departments play a key role in ensuring that all disposals are reflected in the University’s annual financial statements.

The following are general requirements with regard to the disposal of capital assets:

  • Identify items at least once a year that are still located in the department but are no longer in use by the department.
  • Identify items which are no longer in the department. These could include:
    • items which have been disposed but the disposal was not reported; or
    • items sold internally and now located in another University department.
  • Remove disposals from departmental capital asset records.

The section on Transfer of Capital Assets to Another University in situations where a researcher is relocating to another Canadian university and requests authorization to transfer equipment which they are currently using in their research, to that university.

CICA Handbook

Questions and assistance with capital asset disposals should be addressed to Ivona Gruszka, 905-302-0032,