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: In year 10, the original wooden floor was replaced with a concrete reinforced floor. The cost of the improvement was $ 80,000 and the useful life remained the same. The $ 80,000 should be capitalized because it improved the value of the overall asset value by 27%, which is more than 25% of the original cost. 7.4.5 Building Maintenance Expense
(Last Modified on May 1, 2017)
The following are examples of expenditures, which should be recorded as maintenance expenses because they do not qualify as capital improvements. Adding, removing, and/or moving of walls relating to renovation projects that are not considered major rehabilitation projects and do not increase the value of the building
Improvement projects of minimal or no added life expectancy and/or value to the building
Plumbing or electrical repairs
Cleaning, pest extermination, or other periodic maintenance
Interior decoration, such as draperies, blinds, curtain rods, wallpaper, etc. Exterior decoration, such as detachable awnings, uncovered porches, decorative fences, etc. Maintenance-type interior renovation, such as repainting; touch-up plastering; replacement of carpet, tile, or panel sections; sink and fixture refinishing, etc.