Business Procedures Manual

Fiscal Affairs Division

7.5 Facilities and Other Improvements

7.5.1 Facilities and Other Improvements Definition

(Last Modified on May 1, 2017)

Facilities (other than general use buildings) and Other Improvements are depreciable assets that are built, installed or established to enhance the quality or facilitate the use of land for a particular purpose.

Facilities should be capitalized if the new asset is at the capitalization threshold of $ 100,000. Other improvements should be capitalized if the improvement is at the capitalization threshold, or the expenditure increases the life or value of the original asset by 25 percent of the original life period or cost.

Other Improvements should be recorded as an addition of value to the existing asset using a parent/child asset management relationship. The useful life of the addition (the 鈥渃hild鈥) should generally not exceed that of the original asset (the 鈥減arent鈥). However, if the Other Improvement is not an integral part of the original asset, it may possess a different useful life than the parent asset. The useful life of the parent may be modified to reflect an increase in useful life.

7.5.2 Depreciation Methodology

(Last Modified on May 1, 2017)

The straight-line depreciation method (historical cost less residual value, divided by useful life) will be used for facilities and other improvements.

7.5.3 Capitalization Threshold

(Last Modified on May 1, 2017)

The capitalization threshold for Facilities and Other Improvements is $100,000. Examples of expenditures to be capitalized as Facilities and Other Improvements include:

  • Fencing and gates
  • Signs at institution entrances
  • Landscaping
  • Parking lots, driveways, parking barriers, etc.
  • Lighting systems, such as for the campus, parking areas, streets, etc.
  • Outside sprinkler systems
  • Recreation areas and athletic fields, including bleachers
  • Golf courses
  • Paths and trails
  • Septic systems
  • Swimming pools, tennis courts, basketball courts, etc.
  • Fountains
  • Plazas and pavilions
  • Retaining walls

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