# Presentation: 188862

## NASA Interim Directive (NID) 9250Identifying Capital Assets and Capturing Their Costs

**What prompted the implementation of this NID?**
- Concern from external auditors about the methods currently used to account for capital assets which contributed to the Agency’s inability to receive a clean opinion on its financial statements
- Lack of a clean opinion places the Agency’s financial integrity in question
- Financial integrity is essential to obtain the Agency’s resources required to achieve its Mission
**What Authority embraced the implementation of this NID?**
- Federal Accounting Standard Advisory Board (FASAB), Technical Release 7 - Clarification of Standards Relating to the National Aeronautic and Space Administration’s Space Exploration Equipment, released on May 25, 2007
**What does the mandate require on this NID?**
- Requires Programs and Projects to identify each unique piece of capitalized Property, Plant and Equipment (PP&E) _*before*_ purchase and/or fabrication costs are incurred starting on October 1, 2007

## What are the included criteria for this NID?

PP&E must be $100,000 or greater unit acquisition cost
PP&E must have two (2) or more years of useful life
PP&E assets must have an alternative future use that is known at the time the Capital Assets are planned  

What is needed to track and report Capital Assets’ Cost as required by NID?

Requires the creation of a unique Work Breakdown Structure (WBS) element for each recognized piece of capitalized PP&E
Record its acquisition and/or fabrication costs against the WBS, whether incurred internal to NASA or by Contractors
Contractors are required to report capitalized PP&E costs by individual pieces on NF533 and Invoices 

- PP&E must be $100,000 or greater unit acquisition cost
- PP&E must have two (2) or more years of useful life
- PP&E assets must have an alternative future use that is known at the time the Capital Assets are planned
- What is needed to track and report Capital Assets’ Cost as required by NID?
- Requires the creation of a unique Work Breakdown Structure (WBS) element for each recognized piece of capitalized PP&E
- Record its acquisition and/or fabrication costs against the WBS, whether incurred internal to NASA or by Contractors
- Contractors are required to report capitalized PP&E costs by individual pieces on NF533 and Invoices

**NASA Interim Directive (NID) 9250****Identifying Capital Assets and Capturing Their Costs**

## Who are responsible to implement, review and enforce the requirements on this NID?
NASA Program/Project Managers agreed in May 2007 to accurately classify Capital Assets under the new NID requirements thru Program Guidance under NPR 7120.5D 

NASA Procurement Office to contractually require all contractors involved in the construction and/or acquisition of any Capital Assets to separately report thru the NF533 and separately bill under a unique WBS (HQ CFO and HQ Procurement Office still in negotiations)

NASA Property Acquisition Managers fully committed to accurately identifying and recording Capital Assets from information received from Program/Project Managers reflected on NF1739

NASA Property Accountants fully engaged in the classification of the Capital Assets processed to ensure reporting accuracy as mandated by the Statement of Federal Financial Accounting Standards (SFFAS) #6

- NASA Program/Project Managers agreed in May 2007 to accurately classify Capital Assets under the new NID requirements thru Program Guidance under NPR 7120.5D
- NASA Procurement Office to contractually require all contractors involved in the construction and/or acquisition of any Capital Assets to separately report thru the NF533 and separately bill under a unique WBS (HQ CFO and HQ Procurement Office still in negotiations)
- NASA Property Acquisition Managers fully committed to accurately identifying and recording Capital Assets from information received from Program/Project Managers reflected on NF1739
- NASA Property Accountants fully engaged in the classification of the Capital Assets processed to ensure reporting accuracy as mandated by the Statement of Federal Financial Accounting Standards (SFFAS) #6

**NASA Interim Directive (NID) 9250****Identifying Capital Assets and Capturing Their Costs**

## How can the Center prepare for the implementation of this NID?

Complete the Alternative Future Use Questionnaire (AFUQ) NF1739 and analyze negotiated contracts with a starting date of October 1, 2007 or later for reporting requirements 

Re-negotiate contracts with a starting date of October 1, 2007 or later containing Capital Assets to accurately reflect the new requirements

Train Program/Project Managers on how to identify and classify Capital Assets on AFUQ

Prepare a draft letter signed by the Center Director encouraging full participation from Program/Project Managers and other directorates 

Establish periodic monitoring controls to ensure compliance 

- Complete the Alternative Future Use Questionnaire (AFUQ) NF1739 and analyze negotiated contracts with a starting date of October 1, 2007 or later for reporting requirements
- Re-negotiate contracts with a starting date of October 1, 2007 or later containing Capital Assets to accurately reflect the new requirements
- Train Program/Project Managers on how to identify and classify Capital Assets on AFUQ
- Prepare a draft letter signed by the Center Director encouraging full participation from Program/Project Managers and other directorates
- Establish periodic monitoring controls to ensure compliance

**NASA Interim Directive (NID) 9250****Identifying Capital Assets and Capturing Their Costs**

## Overall Process Approach/Changes

**Track costs of Capital Assets through the use of unique WBS elements**
- Identify Capital Assets before they are purchased or fabricated
- Programs are required to identify capital assets by completing the Alternative Future Use Questionnaire before purchasing or fabricating new equipment both at the outset of the project and anytime during the project lifecycle.
- This is part of the Acquisition Planning
- Assign a unique WBS element to an asset in order to accumulate its cost
- When purchasing equipment that meets the capital asset criteria, the program must create a WBS element within the project WBS that is unique to each capital asset identified.  No costs, other than those associated with the capital asset, can be accumulated in the WBS element for an asset.
- Assign an Asset Attribute to the WBS element to identify what type of asset the costs are associated with
- When a capital asset WBS element is created, an asset attribute must be assigned to the WBS element.  The attribute identifies a WBS element as belonging to a capital asset and thus enables reporting of capital asset costs.
- Require contractor cost reporting of the costs of each asset separately
- For 533 contracts, costs of individual assets need to be cross-walked from contractor reports to CCR
- For non-533 contracts, costs of individual assets need to be specifically broken out
- Require contractor invoices / vouchers to provide a breakout by each unique asset