Title: Repairs and Capital Improvements | Accounting Office | NDSU
Headings: Repairs and Capital Improvements
Repairs and Capital Improvements
Early Classification
Project Startup
Repairs vs Capital Improvements
Fund and Project Accounting
Minor Remodeling Projects
Construction Project Numbers and Funds
State Appropriations:
University Appropriations
Other Appropriations
Local Funds:
Account Codes
Codes for Capitalized Costs:
Codes for Repair Costs:
Equipment vs Building Improvements
Department Accounting Responsibilities
Program Codes

Content: Such items are reported as operating expenses and are not capitalized. Examples are: replacement or repair of floor covering or roofs, reconditioning by replacing small parts, painting, or regular maintenance costs. Costs to replace an existing asset, or asset portion, with an improved or superior asset, usually at a cost materially in excess of the replaced item are considered improvements. Usually an improvement results in a better, more efficient or more productive asset. Improvements may also include extraordinary repairs and replacements, which are major repairs and replacements made, not to keep an asset in its normal state of repair, but to extend its useful life beyond that originally estimated. Improvement projects to buildings, infrastructure, or land improvements, which are greater than $10,000, are capitalized. For financial reporting purposes, when costs are capitalized they are not all immediately recognized as operating expenses. Capitalized costs are added to the value of the capital asset and spread out over the life of the improvement through the calculation and recording of depreciation expense. Depreciation expense is calculated and recorded by the NDSU Accounting Office.