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Capital Asset Internal Sale or Disposal

Capital assets include land, buildings, furniture, equipment, books, artwork and other assets funded from any source, including research awards. For an overview of capital assets and the policy governing the security of capital assets see the Guide to Financial Management (GTFM).

Per Chapter 13, Section 1, of the GTFM, only assets over $5,000 in value are recorded in the central capital asset records. If the asset cannot be located on the capital asset listing and the department with custody does not have information on the original cost, when filling out the Capital Asset Disposal form, enter “Not available” in the column headed Original Cost. Be sure to include the PO number or the year the equipment was purchased.

The following is the general procedure for capital asset disposals:

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1. Download Form

2. Complete Section A

The selling department completes Section A of the form, which is a listing of the capital assets for disposal (space is available on the second page of the form for additional disposals).

  • List quantity, description of equipment, manufacturer name, model/serial number, building/room number, etc.
  • The original cost should be available on departmental listing of capital assets. If this information cannot be determined by the department with custody of the asset, enter “Not available” in the column Original cost. Also include the PO number or the year the equipment was purchased.

3. Send form to Procurement Services

Once Section A is completed, the selling department should send the form to purchasing.help@utoronto.ca for determination and approval of the fair market value. Procurement Services then completes Section B of the Capital Asset Disposal Form, and returns the form to the originating (selling) department.

4. Find Buyer

It is the selling department’s responsibility to find a buyer. The surplus asset should not be disposed if it can be used by another department/user within the University. Therefore, if a University buyer has not already been identified, the department should take steps to do so.

5. Obtain Approval

When a buyer has been identified, the selling department completes Sections C, D, E, F, G referring to the chart Approval of Disposals and Allocations of Proceeds.  Also refer to the section of Internal Sales of Capital Assets. Where there is no buyer and the asset is deemed to have fair market value of $200 or less, complete the Swap Shop Disposal form. In addition, contact the Swap Shop at 416-978-7080 or refer to their website at http://www.fs.utoronto.ca/recycle/swap.htm

6. Send Completed Form to Financial Services

When the transfer or disposal is completed, forward a copy of the Capital Asset Disposal Form to:

Accounting Services
Capital Fund Accountant
Financial Services Department
215 Huron Street, 2nd Floor


Additional Important Information

  • Trade-ins: Forward a copy of the Capital Asset Disposal Form to Procurement Services referencing the FIS purchase order number or if the purchase of equipment is over $25,000 before trade-in reference the FIS purchase requisition number.
  • External Sales:  Prepare an invoice to the buyer and attach a copy of the completed Capital Asset Disposal Form to the Accounts Receivable copy of the invoice. Process the invoice according to established procedures. Update the departmental capital asset records to remove the asset.
  • Internal Sales:  The selling department prepares and processes the journal entry in FIS for the proceeds of disposition. The selling department would remove capital asset from their capital asset records; the buying department would add the capital asset to their capital asset records.
  • Tax Implications on External Sales of Capital Assets:
    • Harmonized Sales Tax (HST) – Equipment used in commercial activities prior to sale must be subject to HST. Sale of equipment used in non-commercial activities (ie. research or administrative) are not taxable and therefore, not subject to HST.
  • Sales outside Canada:  If transferring the capital asset outside of Canada , consult the University customs broker’s website for information on duties and cross-border regulations.
  • Obtain payment for external sales:  Payments received in relation to external sales which are processed with reference to an invoice issued by the selling department should be forwarded to: Accounts Receivable, 215 Huron Street, Toronto , ON M5S 1A2

If there is any question as to collectability, release the asset only upon receipt of payment.