State of Connecticut Property Control Manual Appendix A - Glossary of Terms

state of connecticut

Appendix A

GLOSSARY OF TERMS

Access: To instruct, communicate with, store data in, or retrieve data from a computer, computer system or computer network.

Acquisition: To come into possession of property by means of buying, gift, foreclosure, eminent domain, escheat, construction, transfer.

Acquisition Date: The date that the fixed asset was received by the agency. This is the first day of the asset's useful life.

Agency: Any subdivision of the government of the State including, but not limited to, any executive office, department, division, bureau, board, commission or committee therein.

Asset: All tangible and intangible property that is in the lawful possession of an agency. For example, land, buildings, equipment, software etc.

Asset Listing: A printed listing of all land, buildings and other tangible personal and real property resulting from the inventory of fixed assets that falls into a prescribed category and qualifies for inclusion in an asset management file.

Authorized Software: Refers to either the source or executable code or both that is acquired by the State to be used on a computer. This computer software has been developed, approved, purchased or licensed by the agency.

Building: State owned units that are fabricated, framed or constructed, designed to stand permanently and covering a space of land, including fixtures and sub-surface structures in which people work or live and items are stored.

Building Fixed Equipment: Includes furniture and equipment affixed to the building (general contractor-installed equipment) which serves the function of the agency, such as built-in benches, cabinets, counters, tables, lockers, conveying equipment, fume hoods, refrigeration machinery and piping, built-in shelving, paging systems, and clock systems.

Building Services Systems: Include attachments to the building, such as wiring, electrical fixtures, plumbing, heating systems, and air conditioning systems, and have the following general characteristics: are affixed to the building and not subject to transfer; and have a fairly long life, but one which is shorter than the life of the building to which they are affixed.

Cannibalization: The removal, for reuse, of components, rendering the parent unit unusable.

Capital Asset: All tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

Capital Lease: A lease of an asset, which treats the asset as being owned. A lease of this nature must be capitalized if it meets the criteria. Equipment being purchased under a capital lease should be recorded in this category at the beginning of the lease term. The initial recording value of a lease is the lesser of the fair market value of the leased property or the present value of the minimum lease payments (excluding interest payments).

Capital Threshold: Dollar value at which a government elects to capitalize tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

Computer: An electronic, magnetic, optical, or other processing device or system that performs logical, arithmetic, memory, or storage functions. It includes personal computers, notebooks, LAN servers, minicomputers and mainframes or any storage facility or communications facility that is directly related to or operated in conjunction with that device or system.

Computer Network: (A) A set of related devices connected to a computer by communications facilities, or (B) a complex of two or more computers, including related devices, connected by communications facilities.

Computer Software: One or more computer programs, existing in any form, instructions, manuals, associated operational procedures, or other documentation. Software provides the instructions and controls through symbolic languages of the operation of all computers including stand-alone and LAN (local area network) personal computers and related equipment as well as mainframe computers.

Computer System: One or more connected or unconnected computers, peripheral devices, software, data, program communications facilities, and computer networks.

Computer Virus: A software executable code segment which is covertly incorporated into the executable program code files (i.e. EXE, BIN, BAT, SYS, COM, DLL, etc.) or data files of a computer or computer network and is activated when the host programs executes. It can cause system crashes, changes in data or complete erasure of hard drives.

Construction: All associated cumulative cost (i.e. design, survey, furnishings and fixtures, etc.) related to a capital project that results in a fixed asset of the State. (Upon completion of the capital project, i.e., the point at which the asset is placed in service for its intended use, the balance in the construction in progress account is transferred to an appropriate asset account such as buildings).

Construction completed: DAS prepares a "Certificate of Completion" when a building is entirely completed that indicates the final construction contract cost, pending potential closeout or contingency costs. It includes, unlike the "Certificate of Substantial Completion", certain additional project costs on the Form C.O. PW14, "MEMORANDUM". Examples of these adjunct costs are additions or deletions to the original construction contract, design and DAS fees, and other project costs like telecommunication, hazardous material removal as part of major renovation that increases the economic life of the building, or construction performed separately by a contractor other than the major contractor. Project costs previously reported to the Office of the State Comptroller via the CO-59 should be adjusted, as part of the CO-59 reporting process, to reflect the final cost of the completed capital project. In order to avoid duplicate reporting of capital project costs on the CO-59, it is important that construction-in-progress costs separately reported to the Comptroller's Office be reduced to reflect the closeout of all completed projects. The agency should add the value of the asset to the capitalized building value on the CO-59.

Construction - partially complete: This describes the situation when a component portion of a capital project (e.g., a new wing or floor) is substantially complete or complete and ready for use. A letter from DAS is issued declaring that the project is partially complete and ready for use, describing the areas that are partially complete, transferring ownership of the completed component to the client agency, and stating the approximate cost. This approximate cost figure for the partially completed project is used for insurance purposes and also for reporting by the client agency to the Office of the State Comptroller via the CO-59. In order to avoid duplicate reporting of capital project costs on the CO-59, it is important that construction-in-progress costs separately reported to the Office of the State Comptroller be reduced to reflect the transfer of partially completed projects to an agency's custody for occupancy by that agency. The agency should add the value of the asset to the capitalized building value on the CO-59.

Construction - substantially complete: A "Certificate of Substantial Completion" is issued by the Department of Administrative Services when an entire project is substantially complete and now under that agency's custody, ready for occupancy. An estimated cost of the project to date is included in the letter, which is used for insurance purposes and for reporting by the client agency to the Office of the State Comptroller on the CO-59. In order to avoid duplicate reporting of capital project costs on the CO-59, it is important that construction-in-progress costs separately reported to the Office of the State Comptroller be reduced to reflect the transfer of substantially completed projects to an agency's custody for occupancy by that agency. The agency should add the value of the asset to the capitalized building value on the CO-59.

Construction in Progress: The building is not occupied. In these instances the cumulative cost of projects in process does not have to be reported to the Office of the State Comptroller via the CO-59. Instead, this information is generally reported to the Office of the State Comptroller via customized GAAP closing package requests that are sent out at fiscal year end to facilitate the preparation of the State's Comprehensive Annual Financial Report. As the Department of Administrative Services administers most capital projects, construction-in-progress data is maintained at that agency. For capital projects that are administered by other State agencies, construction in progress information would be maintained at those departments.

Controllable Property: Controllable property is tangible property with a unit value less than the capitalization threshold, an expected useful life of one or more years and/or, at the discretion of the agency head requires identity and control. It is mandatory that each agency maintains a written listing of controllable property that has been approved by the agency head. Such assets must be identified and controlled because of their sensitive, portable, and theft-prone nature. The item must be tagged and maintained on the agency's perpetual inventory. Different color or style tags can be used to separate controllable items from capitalized items. Controllable items are to be coded as commodities. Refer to Chapter 3.

Copyright: The rights granted to the owner of software by the Copyright Act. End User License Agreement (EULA) is often used in place of the term "Software License". See that definition.

Cost: See historical cost.

Depreciation: The method of allocating the cost of a fixed asset over its estimated useful life in a systematic and rational manner.

Disposal: The act of getting rid of surplus property.

Disposition: That action taken to physically transfer property from one's accountability.

Easement: The right of one party to use the property of another party. An easement is an intangible asset that has an indefinite useful life or has a useful life of 25 years or more.

Equipment: The implements used in an operation or an activity. This includes, but is not limited to, machinery, vehicles, computers (hardware and software), other electronic and/or electrical devices and furnishings.

Fair Market Value: The estimated amount at which the property might be expected to exchange between a willing buyer and a willing seller, neither being under compulsion, each having reasonable knowledge of all relevant facts, with equity to both.

Fixed Assets: All tangible property owned by the State (real and personal) such as land, buildings, and equipment, etc. with a useful life beyond a single reporting period and used in agencies.

Furniture: Movable articles in a room or establishment that render it fit for working or living. It includes items such as chairs, tables, cabinets, bookcases, etc.

GAAP Fixed Assets: Buildings, equipment and construction in progress (including all furnishings and fixtures) with a historical unit cost of the capitalization threshold or more.

Hardware: Physical components or apparatus including major items of equipment.

Historical Cost: Original cost of an asset as distinct from the replacement cost. This would be the total cost of an asset when acquired, including ancillary asset cost.

Identification: The physical marking of property and/or in some cases its container. To provide the means by which ownership can be ascertained.

Improvement: An addition, alteration or structured change to an asset that results in its greater durability or extended useful life or to comply with current code or regulations.

Intangible Asset: An intangible asset is an asset that possesses all of the following characteristics, lack of physical substance, nonfinancial nature, and initial useful life extending beyond a single reporting period.

Internally Generated Software: Software that is created or produced by the government, an entity contracted by the government, or if they are acquired from a third party but require more than minimal incremental effort on the part of the government to begin to achieve their expected level of service capacity.

Inventory: A complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc.

LAN: Means Local Area Network or a system served by a single file server.

Land: Ground, earth/soil and the water thereon, for which the State has title.

License Agreement: A contract between the software publisher and the user to install and use a copy of software code under specific circumstances as defined by the publisher or manufacturer of the software.

Lost: Item having no departmental record of its location, condition, etc., following a scheduled inventory, and unless found, is deleted from the inventory master list.

Maintenance: Day-to-day, routine, normally recurring repair and upkeep to keep an asset in its existing state preserve from failure or decline. Maintenance activities keep an asset in good working condition throughout its estimated useful life.

Materials: Property, which may be incorporated into or attached to an end item. Includes raw or processed material, parts, components, assemblies, small tools and supplies.

Movement: The act of relocation or transferring property from one location to another.

Normal Useful Life: The life reasonably expected of new property based on average experiences, allowing for normal wear and tear, anticipated functional and economic obsolescence, and hazards. Normal life expectancies are derived from mortality data and study of specific properties under actual operating conditions.

Operating Lease: An equipment item that is leased whereby ownership is not transferred to the lessee, in effect no purchase is made, is called an operating lease. If, under the terms of the operating lease agreement, the state agency as lessee were responsible for insuring the property, then the asset would be recorded within this category. Include only operating lease property (property from capital leases should be recorded under the appropriate category, such as equipment). Maintain sufficient detail to identify property and location including value. However, enter only the total value for which the State is obligated for insurance purposes.

Person: A natural person, corporation, trust, incorporated or unincorporated association and any other legal entity or governmental entity, including any state or municipal entity or public official.

Personal Property: All property or rights therein, other than that determined to be real property.

Physical Inventory: The process of preparing an itemized list recording land, buildings, equipment and other tangible property having an identity which remains constant. This process allows for accountability and results in an asset listing for the purpose of asset management.

Plant Equipment: Personal property of a capital nature consisting of equipment, furniture, vehicles, etc.

Procurement: To acquire or make available. The function responsible to buy or make available material or equipment.

Radioactive Material: That which is subject to spontaneously emitting alpha, beta, and sometime gamma rays.

Real Property: Land and rights therein, ground improvements, utility distribution systems, buildings and structures. It includes foundations and other work necessary for the installation of special equipment.

Receiving: The function or act of reviewing and accepting property into one's accountability or possession.

Records: Written data providing pertinent information regarding a specific subject such as property.

Repair: Work required to return a fixed asset to a condition that it may continue to be effectively used for its intended purpose by overhaul or replacement of parts or materials which have deteriorated due to weather or wear and tear. Routine repair and maintenance, including replacements and renovation costs that are incurred to maintain the asset in its operating condition and that do not increase the asset's economic benefits over those originally intended are not to be included and are expensed.

Salvage: Property which, because of its worn, damaged, deteriorated, or incomplete condition or specialized nature has not reasonable prospect of sale or use as serviceable property without major repairs or alterations but has some value in excess of its scrap value.

Scrap: Property that has no reasonable prospect of being sold except for the recovery value of its basic material content.

Screen: To review or compare property on hand against a known or anticipated requirement.

Sensitive Items: Those, which regardless of value, could easily be adopted for personal use or converted to cash.

Site Improvement: Site improvements include all improvements not specifically identifiable to an individual building except non-depreciable improvements to land parcels such as grading or filling expenditures. Included within this category are agency - maintained surface gutters, parking lots, lights and similar assets which, while not identifiable to any particular structure, nevertheless have a quantifiable value to the agency. Refer to Chapter 5.

Software: Programs, procedures, and related documentation related to a system, computer programs.

Source Document: A fundamental document or record of transaction.

Stolen: Item reported as being illegally taken or removed from its designated location and, if unrecovered is deleted from the inventory master list.

Storage: To accumulate property for some specific objective.

Surplus Property: Any property owned by the State that an agency no longer needs to support its operations. This includes property that the agency has not formally declared as surplus.

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