Business Office

Capital Assets

Capital Assets are property, such as land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure, and all other tangible and intangible assets that:

are acquired for use in normal operations and not held for purposed of investment or resale;
are permanent in nature, having initial useful lives extending beyond a year; and
have a value equal to or greater than certain thresholds established by the following guidelines and/or federal regulations at the date of acquisition.

Equipment represents movable items that cost $5,000 or more; does not lose its identity when removed from its location, and is not changed materially or expended in use. Equipment may be purchased, fabricated, or received by donation. Examples of movable equipment include furniture, office equipment, teaching equipment, computer equipment, audio visual equipment, laboratory equipment, heavy equipment, and motor vehicles.

Account Codes for Equipment:

78110 – Office Equipment: Furniture and equipment for an office.

78120 – Operational Equipment: Equipment needed for department operations.

78125 – Computer Equipment – Administration: Computers for administrative purposes.

78130 – Instructional Equipment: Equipment for educational purposes.

78135 – Computer Equipment – Instruction: Computers for instructional purposes.

78190 – Other Equipment: Equipment not classified elsewhere.

Computer related items which cost between $1,500.00 and $4,999.99 that are movable in nature and particularly vulnerable to theft. Examples include computers, printers, external computer storage devices, PDAs, and external computer scanners.

Account Code for Computer Purchases: 74596

Items that cost less than $5,000 are considered non-capital items or supplies.

Non-Computer Sensitive Items

These are movable items (excluding computers) valued between $1,500 and $4,999.99, which are particularly at risk of theft.

Account Code for Non-Computer Sensitive Items: 74597

Supplies are the everyday items needed to operate the University. These include office supplies, instructional materials, and other necessary items. They are generally low-cost and can be easily lost or consumed.

Account Code for Office Supplies: 74510

Maintenance costs are expenses for keeping assets in good condition or restoring them to their original state. This includes replacement parts and extended warranties.

Account Code for Equipment Maintenance: 74310

Land is considered a non-depreciable asset with an indefinite lifespan. It should be recorded at its original purchase cost, including all expenses related to its acquisition and preparation for use.

The following are examples of expenditures that should be capitalized as a part of the cost of land:

The original acquisition price.
Commissions related to the acquisition.
Legal fees related to the acquisition.
Cost of surveys.
Cost of an option to buy the acquired land.
Cost of removing unwanted buildings from the land, !ess any proceeds from salvage.
Unpaid taxes (to the date of acquisition) assumed by the University.
Cost of permanent improvements (e.g. landscaping) and improvements that will later be maintained and replaced by other governments (e.g. street lights, sewers).
Cost of getting the land in condition for its intended use, such as excavation, grading, filing, draining, and clearing.

Land Improvements

Land Improvements costing $50,000 or more should be capitalized separately and depreciated over their useful life. Examples include:

Landscaping
Parking Lots
Fencing

Account Codes for Land and Land Maintenance:

78210 – Purchase of Land

78220 – Site Development/Improvement

78290 – Other Land costs

74330 – Maintenance of Grounds

Buildings must cost $100,000 or more to be capitalized. The cost includes all necessary expenditures to acquire or construct and prepare the building for its intended use.

Buildings consist of relatively permanent structures, including a\l permanently attached fixtures, machinery and other appurtenance that cannot be removed without damaging the building or the item itself.

Buildings costing less than $100,000 are non-capitalized expenses should be expensed.

Buildings acquired by purchase should be capitalized at their original cost. The following major expenditures are capitalized as part of the cost of buildings:

The original bargained purchase price of the building.
Cost of renovation necessary to prepare the building for its intended use.
Cost of building permits related to renovation.
Unpaid taxes (to date of acquisition) assumed by the University.
Legal and closing fees

Buildings acquired by construction should be capitalized at their original cost. The following major expenditures are capitalized as part of the cost of buildings:

Cost of constructing new buildings, including material, labor, and overhead.
Cost of excavating land in preparation for construction.
Cost of plans, blueprints, specifications, and estimates related to construction.
Cost of building pennits.
Architectural and engineering fees.
Landscaping and other improvements related to the building construction that cannot be separately identified from the building project (e.g. wiring within the building, shrubbery and sidewalks around the building).

Buildings acquired by donation, or the intent to donate, e.g. for one dollar, should be recorded on the basis of an appraisal of the market value at the date of acquisition.

The cost of a building that is acquired but immediately removed to prepare the land for construction of a new building is treated as part of the cost of the land rather than as part of the cost of the new building.

The cost of removing an old building that you have occupied in the past but that is now deteriorated and must be removed prior to constructing a new building, should be capitalized as a part of the cost of the new building.

Additions and Improvements to Buildings

Additions and improvements costing $50,000 or more are capitalized because they enhance the building’s value. Costs under $50,000 are treated as maintenance.

Account Codes for Buildings:

78310 – Purchase of Building

78320 – Construction of Buildings

74320 – Maintenance of Buildings

74984 – Non-Capitalized Expenses

Infrastructure improvements costing $50,000 or more relate to the essential structure and function of the campus. Examples include, but are not limited to:

Roads
Utility Systems
Tennis Courts
Severe weather systems
Athletic scoreboards
Lighting
Radio and television towers
Signage

Account Codes for Infrastructure:

78410 – Parking Lots/Walks/Etc.

78420 – Utility System/Etc.

78490 – Other Improvements

Capitalized software costs will include external direct costs of materials and services consumed in developing or obtaining internal-use computer software.

Training costs are not internal-use software development costs and should be expensed as incurred.

Data conversion often occurs during the application development stage. Data conversion costs should be expensed as incurred.

Internal costs incurred for maintenance should be expensed as incurred.

Account Codes for Computer Software:

74435 – Software costing less than $100,000

78610 – Software costing $100,000 or more

A SBITA is a contract, for more than one year, that allows the use of another party’s information technology (IT) software (alone or with physical assets) for a certain period in an exchange or exchange-like transaction. The contract terms must be more than one year to be considered a SBITA.

Account Codes for Subscription-Based Software:

74435 – Subscription-based software under $100,000

78890 – Subscription-based software coisting $100,000 or more

A lease is a contractual agreement, longer than 12 months, that conveys the right to use property, plant, or equipment for a specified period of time.

Rentals are short-term agreements for property use, usually month-to-month.

Account Codes for Lease Classifications:

Equipment Lease:

78870 – Leased Equipment (Contract term > 1 year, cost ≥ $5,000)

74625 – Operating Leases (Contract term < 1 year or cost < $5,000)

Land Lease:

78800 – Leased Land (Contract term > 1 year, cost ≥ $50,000)

74615 – Operating Leases (Contract term < 1 year or cost < $50,000)

Building Lease:

78850 – Leased Buildings (Contract term > 1 year, cost ≥ $100,000)

74610 – Operating Leases (Contract term < 1 year or cost < $100,000)

Infrastructure Lease: