Building Capitalization Policy
Construction Accounting is responsible for following University Policy regarding capitalization decisions associated with all construction projects.
Reason for Directive
To comply with statutory provisions and generally accepted accounting principles.
Who must comply?
All University Departments.
In accordance with statutory provisions and generally accepted accounting principles, the University will capitalize and include in its real property records the following:
- The original cost to construct new buildings
- The costs related to renovation projects which adds new square footage
- The costs for a renovation project which extends the useful life of a component part (i.e. roof, plumbing, electrical, etc.) of the building by two or more years, and meets one or both of the following criteria:
- The costs are $250,000 or more
- The costs are 25% or more than the original cost of the building
Note: Total costs include all professional fees, contingencies, materials, etc. Excluded costs include tangible personal property and asbestos abatement costs
Fixed Capital Outlay (FCO)
Real property (land, buildings, fixtures and fixed equipment) including additions, replacements, major repairs, and renovations to real property which materially extend its useful life or materially improve or change its functional use and including furniture and equipment necessary to furnish and operate a new or improved facility, when appropriated by the Legislature in fixed capital outlay appropriation category.
01/31/2021: reviewed content
Construction Accounting: (352) 392-5778