Contracting Entity (CE): CE ID Number: Texas Department of Agriculture. Worksheet Depreciation April 10, 2013

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1 Depreciation Schedule for Non-Expendable Worksheet (Use only for equipment originally costing more than $100 a unit; use additional sheets if needed) Contracting Entity (CE): Date: Site: CE ID Number: Section I, Food 1 Description and Identification Number Acquisition Cost Life Expectancy Status In Out of Total Section I, Food 1 If equipment is provided from a central source or shared with other users, costs are allocated according to the percentage of actual usage for Food Operations only. Allocation method must be documented. Page 1 of 7

2 Section Il, Vehicles (Empty weight OVER 13,000 pounds) 2 Description and Identification Number Acquisition Cost Life Expectancy Status In Out of Total Section II, Vehicles Over 13,000 Pounds 2 If equipment is provided from a central source or shared with other users, costs are allocated according to the percentage of actual usage for Food Operations only. Allocation method must be documented. Page 2 of 7

3 Section III Vehicles (Empty weight UNDER 13,000 pounds) 3 Description/Identification Number Acquisition Cost Life Expectancy Status In Out of Total Section III, Vehicles Under 13,000 Pounds 3 If equipment is provided from a central source or shared with other users, costs are allocated according to the percentage of actual usage for Food Operations only. Allocation method must be documented. Page 3 of 7

4 Section IV, Summary Depreciation Schedule for Non-expendable Type of Section I, Food Total Section II, Vehicles, Heavy Weight Total Section III, Vehicles, Light Weight Total Total All Types of Total Number of Months in Operation Monthly Depreciation Page 4 of 7

5 Directions: Depreciation Schedule for Non-expendable Worksheet Purpose This form is designed to assist a Contracting Entity (CE) in documenting and determining the depreciation value of equipment with an original value of more than $100. This form provides yearly and monthly depreciation values. Depreciation information is reported on other school nutrition program fiscal forms including the Summary of Food Costs Form. 4 This form allows CEs to record depreciation values for three types of equipment: Section I: Food Section II: Vehicles over 13,000 pounds Section III: Vehicles under 13,000 pounds. Frequency Required Form Format Record Retention Use This Form Yearly, but provides monthly values as well Use this form or a similar form Completed form sent to TDA as directed and kept onsite and made available on request. State Board of Education policies require public and charter schools to maintain records for a period of five years. Private schools and RCCIs maintain records for three years. For many CEs, the value for depreciated equipment is determined by a financial officer. The food nutrition director should work with that financial officer to complete this form. Things to Know Before Completing Form Method for Depreciation Each CE must use a method of depreciation that meets the standards of local, state, and federal regulation and law. CEs will find detailed information on appropriate depreciation methodologies at Shared United States Internal Revenue (IRC) Overview, Forms, and Explanations Located at United States Office of Management and Budget, (OMB) Circular A-87 (2 CFR, Part 225) Located at Texas Comptroller of Public Accounts, Capital Assets, Depreciation Located at If a central source provides equipment to multiple sites or equipment is shared with other users, costs are allocated according to the percentage of actual usage for Food Operations only. The CE s method of allocating percentages must be documented. Documentation must be retained. Changing Methodologies A CE must use the same method of depreciation year after year unless permission is given to change methodologies. CEs should contact TDA before changing its depreciation methodology. 4 Form available at Page 5 of 7

6 Age of Life Expectancy and Depreciation Schedule Depending on the type of equipment, there are a standard number of years that are allowed for the depreciation of equipment. The number of years varies by the type of equipment. As the equipment ages, the value of the equipment decreases. After a specific number of years, the value of the equipment drops to zero. The number of years allowed is called the equipment life expectancy. The systematic decrease in value by year is called the depreciation schedule. The resources referenced in the Method of Depreciation subsection in these directions will be useful in assigning a depreciation schedule for each type of equipment. Directions for Completing Form General Information Contracting Entity (CE): Record the name of the CE in the designated space. CE ID Number: Record the ID number for the CE in the designated space. Site: Record the name of the site in the designated space. Date: Record the date the form is completed in the designated space. Section I, II, and III Determine the appropriate section for recording information about each item: Section I, Food Not over 20 years old Section II, Vehicles Empty weight over 13, 000 pounds Section III, Vehicles Empty weight under 13, 000 pounds : Record the date the item was purchased in the designated space. If the item was purchased, but not used immediately, the date of purchase is still the date used to determine depreciation. Description and Identification Number: Record a brief description and identification number, if available, for each item in the designated space. Acquisition Cost: Record cost of the item when it was purchased in the designated space. If the item was donated, the CE should use fair market value to determine the acquisition cost. Life Expectancy: Record the number of years for depreciation of the equipment in the designated space. The life expectancy for equipment is set by local, state, and federal regulation and law. The resources described in Things to Know Before Completing Form provide this information. For Example: A computer has a life expectancy of 5 years. In this case, a 5 would be recorded in the designated space. Page 6 of 7

7 : Record the current depreciated value of the equipment in the designated space. The depreciated value is based on the original cost of the equipment and the equipment life expectancy. This information is contained in the depreciation schedule. For Example: The following depreciation schedule of a straight line process illustrates the depreciation values for a computer that costs $ Age from Original Cost of Item Percentage of Original Cost Based on Percentage of Original Cost 1 $800 x 80 % = $640 2 $800 x 60 % = $480 3 $800 x 40 % = $320 4 $800 x 20 % = $160 5 $800 x 0 % = $0 There are other methods for depreciation that a CE may use. The resources listed in the Things to Know Before Completing Form subsection in these directions will be helpful in identifying the most appropriate methodology. The CE s financial or accounting department may also provide information related to depreciation. Status: Record a check in the box under Status that reflects whether the equipment is In or Out of in the designated space. The Status, In and Out designation will help the CE in tracking equipment that has been sold or discarded. Section, I, II, and III Total: Total the amounts in the Column for each section. Record the amount in the designated space. Section IV, Summary Depreciation Schedule for Non-expendable Total : Record the total for each section s column in the designated space. All Types of Total: Total the amounts from all three sections to get the total depreciated value of all equipment. Record the amount in the designated space. Number of Months in Operation: Record the number of months each year the program is in operation in the designated space. Monthly Depreciation : Divide the All Types of Total by the Number of Months in Operation to get the Monthly Depreciation. Record the amount in the designated space. All Type of Total Number of Months in Operation Monthly Depreciation = Page 7 of 7