Title: SPA Process User's Guide – FPP N.005
Headings: SPA Process User’s Guide
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Chapter 1 – Introduction to Capital Assets

SPA Process User’s Guide –
Chapter 1 – Introduction to Capital Assets
Buildings and Building Improvements
Building Definition
Building Improvement Definition
Building Componentization
Building Construction
Depreciation Methodology
Capitalization Threshold
Examples of Expenditures to Capitalize as Buildings
Purchased Buildings
Constructed Buildings
Examples of Expenditures to Capitalize as Improvements to Buildings
Building Maintenance Expense
Building Demolition Costs

Content: A replacement may also be capitalized if the new item or part is of significantly improved quality and higher value compared to the old item or part (such as replacement of an old shingle roof with a new fireproof tile roof). Replacement or restoration of an item to its original utility level is not capitalized. Determinations must be made on a case-by-case basis. Conversion of attics, basements, etc., to usable office, clinic, research or classroom space
Structures attached to the building (i.e. covered patios, sunrooms, garages, carports, enclosed stairwells, etc.) Installation or upgrade of heating and cooling systems, including ceiling fans and attic vents
Original installation/upgrade of wall or ceiling covering (i.e. carpeting, tiles, paneling, parquet, etc.) Structural changes (i.e. reinforcement of floors or walls, installation or replacement of beams, rafters, joists, steel grids, other interior framing, etc.) Installation or upgrade of window or door frame, upgrading of windows or doors, built-in closet and cabinets
Interior renovation associated with casings, baseboards, light fixtures, ceiling trim, etc. Exterior renovation (i.e. 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 or wiring required for the installation of equipment that remain in the building
Other costs associated with capitalized improvements
Building Maintenance Expense
These are examples of expenditures not to capitalize as improvements to buildings.