no.1412-DEPRECIATION OF LIB. MATERIALS (Response #1)

[Original posting on this topic appeared in COLLDV-l no. 1406 and is
reproduced below; the response follows it.]

From: Mary Ann Van Cura - Thomas Cooley Law School <vancuram_at_mlc.lib.mi.us>

SOLICITING ADVICE/BACKGROUND INFO:  Depreciation of Library Materials

Does anyone else depreciate library materials?
Can anyone provide me with a context for depreciating library materials?
I am familiar with depreciation and capitalization of equipment, but
depreciating library materials is unfamiliar to me.

I have been at this institution just over two years.
The library budget for my library has routinely included a line for
depreciation of library materials (i.e. books, periodicals, etc.).  This
money is never seen by the library.  Rather, it appears as a line item in
the library budget and is kept by the Business Office.  I have not been
able to get an explanation I can understand from our Business Office
staff.  The amount is sizable, and I want to confirm that we are
depreciating appropriate items.

Thanks in advance for any light you can shed on this topic.

Mary Ann Van Cura
Associate Director for Technical Services
Thomas M. Cooley Law School Library     Internet:  vancuram_at_mlc.lib.mi.us
P.O. Box 13038                          Voice: (517) 371-5140 x637
Lansing, MI 48901                       FAX:   (517) 334-5715

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(1)
From: TKRUSE%UBMAIL.dnet_at_ube.ubalt.edu

The purpose of deprecation is to allocate the cost of a multi-year asset
into individual budget years.

Many years ago, I worked at a private company that depreciated library
materials.  This was done mainly to get a R&D tax credit since only capital
assets were covered by the tax credit.

Here at the University of Baltimore, books and periodicals are capitalized
but not depreciated.  This figure is combined with other figures and the
result is a very phony number of the assets of the University.  Our budget
folks have thought about depreciation but since it has not been required by
our state auditors, it has not been done.

We are required to report weeded, withdrawn and lost books.  These are
removed from the asset account.  If your business office folks like to
depreciate, they would love to withdraw "assets no longer in service."

Ted Kruse
University of Baltimore