Title: Accounting for Buildings & Improvements | Finance & Business
Headings: Accounting for Buildings & Improvements
Accounting for Buildings & Improvements
Guidance on establishing when costs for buildings and improvements must be capitalized at the university.
Procedures
1. Purchased Buildings:
2. Construction and Improvements:
3. Fixed Equipment
4. General Improvements

Content: Current funds: The range of expenditures that properly should be treated as capital additions is so varied that it is impossible to provide explicit guidelines. An analysis is made at the time a requisition or purchase order is issued to determine the nature of the work being performed. An evaluation is made to decide if activity is a capitalized additions: must be consistent,
additions must be material (over $35,000)
and the additions must benefit future periods (greater usefulness, increase efficiency, increased life of building). Capital expenditures recorded to current fund must use object code 9700. At the end of each fiscal year, a listing of object code 9700 expenditures will be prepared and reviewed by Capital Asset Accounting for proper classification. Refer to attachment A for cost examples that are capitalized as building improvements or expensed. Determining the capitalization of expenditures paid from current funds: Activity
Description
Treatment
Improvements or betterments
Significant alterations or structural changes to plant assets which increase the usefulness, enhance the efficiency, or prolong the life of property.