Title: Business Procedures Manual | 7.4 Buildings and Building Improvements | University System of Georgia
Headings: 7.4 Buildings and Building Improvements
Business Procedures Manual
Essential business procedural components for University System of Georgia institutions.
7.4 Buildings and Building Improvements
7.4.1 Building Definition
7.4.2 Building Improvement Definition
7.4.3 Depreciation Methodology
7.4.4 Capitalization Threshold
Purchased Buildings
Constructed Buildings
Building Improvements/Replacements
7.4.5 Building Maintenance Expense

Content: Installation or upgrade of heating and cooling systems, including ceiling fans and attic vents
Original installation or upgrade of wall or ceiling covering, such as carpeting, tile, paneling, parquet, etc. Structural changes, such as reinforcement of floors or walls, installation or replacement of beams, rafters, joists, steel grids, or other interior framing
Installation or upgrade of window or doorframes, upgrading of windows or doors, built-in closets and cabinets, etc. Interior renovation associated with casings, baseboards, light fixtures, ceiling trim, etc. Exterior renovation, such as installation or replacement of siding, roofing, masonry, etc. Installation or upgrade of plumbing and electrical wiring
Installation or upgrade of phone or closed circuit television systems, networks, fiber optic cable, wiring required in the installation of equipment that will remain in the building, etc. Other costs associated with the above improvements
Examples of building improvements that should be capitalized (even when the improvements do not meet the $100,000 threshold): Institution has a storage/maintenance building that originally cost $ 200,000 with a useful life of 15 years. After 10 years the building was structurally reinforced with steel beams at a cost of $ 50,000, which extended the useful life to 20 years. Even though the $ 50,000 did not meet the capitalization threshold, this improvement would be capitalized because it extended the useful life by 5 years (33%). Institution has a greenhouse that originally cost $ 300,000 with a 25-year useful life.