Business Procedures Manual

Fiscal Affairs Division

7.9 Works of Art and Historical Treasures

7.9.1 Works of Art and Historical Treasures Definition

(Last Modified on May 1, 2017)

Works of art and historical treasures are collections or individual items of significance that are owned by an institution, which meet the following criteria:

  • Assets are held for public exhibition, education or research in furtherance of public service rather than for financial gain,
  • Assets are protected, cared for and preserved, and
  • Assets are subject to an organizational policy that requires the proceeds from sales of collection items to be used to acquire other items for collections.

Exhaustible collections or items are assets whose useful lives are diminished by display or educational or research applications. Inexhaustible collections or items are assets for which the economic benefit or service potential is consumed so slowly that the estimated useful lives are extraordinarily long. Because of their cultural, aesthetic, or historical value, the holder of the asset applies efforts to protect and preserve the asset in a manner greater than that for similar assets without such cultural, aesthetic, or historical value.

7.9.2 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 exhaustible collections.

Note: Inexhaustible items should not be depreciated.

7.9.3 Capitalization Threshold

(Last Modified on May 1, 2017)

All works of art and historical treasures acquired or donated will be capitalized, unless held for financial gain. Works of Art and historical treasures should be capitalized at historic cost or fair value at date of donation.

If a collection is held for financial gain and not capitalized, disclosures must be made in the notes of the financial statements to provide a description of the collection and the reasons these assets are not capitalized. When donated collection items are added to non-capitalized collections, program expense(s) equal to the amount of revenue(s) should be recognized.

Examples of expenditures to be capitalized as works of art and historical treasures include:

  • Collection of rare books and manuscripts
  • Maps, documents, and recordings
  • Works of art such as paintings, sculptures, and designs
  • Artifacts, memorabilia, and exhibits
  • Unique or significant structures

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