University of Oregon 2019 Annual Financial Report
Notes to the Financial Statements
For the Year Ended June 30, 2019 (dollars in thousands)
security. The UO applies fair market value updates to
its securities on a monthly basis.
Security pricing is provided by a third party, and is
reported monthly to the UO by its custodian bank.
Assets are categorized by asset type, which is a key
component of determining hierarchy levels.
F. Inventories
Inventories are recorded at the lower of average cost or
market, and consist primarily of supplies in storerooms
and physical plant stores.
G. Capital Assets
Capital assets are recorded at cost on the date acquired
or at fair market value on the date donated. The
UO capitalizes equipment with unit costs of $5 or
greater and an estimated useful life of greater than
one year. Real property acquisitions are capitalized if
they meet the capitalization threshold of $50 to $100
depending on the type. Expenditures that increase
the functionality and/or extend the useful life of real
property are capitalized if they meet thresholds of
$50 to $100. Intangible assets with values that meet
or exceed the capitalization threshold of $100 are
capitalized. Expenditures below the capitalization
thresholds, including repairs and maintenance, are
charged to operating expense in the year in which the
expense is incurred.
Depreciation is computed using the straight line
method over the estimated useful lives of the assets,
generally 15 to 50 years for buildings; 10 to 20 years for
infrastructure, land improvements, and improvements
other than buildings; 10 years for library materials; 3 to
11 years for equipment; and the useful life of the asset
or term of the lease, whichever is less, for leasehold
improvements. Amortization terms of intangible assets
vary depending on the factors relating to the specific
asset. Depreciation is not applied to land, construction
in progress, museum collections, works of art,
historical treasures, or library special collections.
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As an institute of higher education in existence for over
the UO has acquired significant collections
years,
of art, rare books, historical treasures, and other special
collections. The purpose of these collections is for
public exhibition, education, or research in furtherance
of public service rather than financial gain. However,
because of their inexhaustible nature, these capitalized
collections are not depreciated and are reported at book
value as non-depreciable capital assets in the SNP.
H. Unearned Revenues
Unearned revenues include amounts received for
tuition and fees, grants and contracts, lease income,
and auxiliary enterprises activities in which cash
has been received, but revenues will be earned in
subsequent fiscal year(s) when eligibility or exchange
requirements are met.
I. Compensated Absences
The UO accrues a liability for vacation leave and
other compensated absences that were earned but not
used during the current or prior fiscal year for which
employees can receive compensation in a future
period. Sick leave is recorded as an expense when
paid. There is no payout provision for unused sick
leave and no resulting liability.
J. Deferred Outflows and Inflows of Resources
Deferred outflows of resources represent the
consumption of net position in one period that is
applicable to future periods, and have a positive effect
on net position that is similar to assets, but are not
considered assets.
Deferred inflows of resources represent the acquisition
of net position that is applicable to future periods, and
have a negative effect on net position that is similar to
liabilities, but are not considered liabilities.
Deferred outflows and inflows are related to defined
benefit pension plans, defined benefit OPEB plans,
and net fair value gains or losses on foreign currency
forward contracts.
K. Pensions
For purposes of measuring the net pension liability,
deferred outflows and deferred inflows of resources
related to pensions, pension expense, information
about the fiduciary net position of the Oregon Public
Employees Retirement System (PERS), and additions to
or deductions from PERS's fiduciary net position have
been determined on the same basis as they are reported
by PERS. For this purpose, benefit payments (including
refunds of employee contributions) are recognized
when due and payable in accordance with the benefit
term. Investments are reported at fair value.
L. Net Position
The UO's net position is classified as follows:
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