Title: Plant Fund | Financial Services & Operations | Michigan Tech
Headings: Plant Fund
Plant Fund
Plant Fund Definition
Capitalization of Plant Fund Assets Definition
Componentization
Capitalization Guidelines
New Construction
Purchase of Existing Buildings
Building Improvements
Site Work
Utilities
Land
Equipment
Capital Leases
Property Trade-In
Gifts
Library Books
Mineral Specimens

Content: If existing buildings on the property will be utilized, the fair market value should  be capitalized as buildings and the amount recorded as land would then be the difference  between the total cost less the amount capitalized as buildings. If buildings need  to be razed for the land to be used for the purpose for which it was purchased, the  cost of razing should also be capitalized as land. Equipment
Equipment items to which the University obtains title will be capitalized into the  "Equipment" account if the items have a unit cost (or fair market value, for gifts)  of $5,000 or more and a life expectancy of one or more years. Included in the cost  of an equipment item are any freight charges paid, insurance charges and duty charges,  when assessed. Equipment items which are permanently attached (fixed equipment) to and are an integral  part of any building, such as exhaust fans, transformers, cranes, ventilation systems,  etc., are not capitalized in the "Equipment" account, but rather in the "Buildings"  account. Equipment items purchased from restricted grants, and title to which is vested in  organizations other than the University, are not capitalized in the University records,  however, such acquisitions must be reported to the Property Office of the University  for accountability purposes. Equipment items purchased from restricted grants where  title is vested to the University are to be capitalized in the University records,  including Fabricated Equipment. Equipment items purchased by the current funds (General, Designated, Auxiliary Activities  and Expendable Restricted) of the University are considered to be expenditures of  the funds from which purchased. Such items are capitalized in the Plant Fund.