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Policy Statement

The University has established a capitalization policy in order to distinguish between expenditures incurred which should be capitalized as property, plant, and equipment and depreciated over a useful life from those expenditures incurred which should be treated as an expense in the University’s financial statements.

Reason for Policy

The purpose of the capitalization policy is to provide consistent and accurate capitalization of all assets held by the University.

Who Is Governed by this Policy

All offices responsible for purchasing, safeguarding, maintaining, disposing and reporting on capital assets.

Policy

Capital Costs

The amount or basis for capitalizing property, plant and equipment is the cost on the date of acquisition or the fair market or appraised value on the date of a donation of property. All expenditures incurred for the asset to be ready for its intended use should be included in the amount capitalized.

Capital Equipment and Vehicles

Furnishings, equipment, and vehicles purchased or donated with a unit cost of $5,000 or more and a useful life greater than one year is considered capital equipment. Expenditures incurred for these items should be capitalized and treated as equipment in the University’s financial statements. Capital equipment is generally movable and may include such items as scientific, athletic, audio-visual, educational, and maintenance equipment, office furnishings, computers, laptops, printers and vehicles.

A purchase of equipment which consists of many items, each with a unit cost less than $5,000, may not meet the definition of capital equipment even if the aggregate amount of the purchase order exceeds $5,000. For example, none of the items would be considered capital in a purchase of office furniture that consists of six desk chairs with unit cost of $500 each, and a conference table at a cost of $3,000. Even though the aggregate cost of the furniture is $6,000 the individual cost of each item is less than the $5,000 threshold.

The acquisition cost, freight, installation fees and in-transit insurance as well as any necessary attachments, accessories, and apparatus should be included in the total cost or basis when making the determination of whether an item exceeds the $5,000 unit value threshold for capitalization. For example, the purchase of a printer with a unit acquisition cost of $3,000, a printer attachment with a cost of $2,000 and freight charges of $250 would be capitalized at a cost of $5,250 even though the unit cost of each of the parts is less than $5,000. Each component part is necessary for the printer to be placed in use therefore, the amounts are totaled to determine whether the item should be capitalized.

Building and Campus Improvements

Building improvements are significant alterations, renovations, betterments, renewals, replacements or structural changes that increase the usefulness of the asset, enhance its efficiency or prolong its useful life by greater than one year. Costs relating to projects that meet this criteria and have a total project cost of $5,000 or more are capitalized. Costs that neither, significantly add to the permanent value of an asset or prolong its useful life are expensed. Recurring custodial services or maintenance and repairs such as painting and repairs are costs that would not meet capitalization criteria. Capital projects below the $5,000 would also be expensed and not capitalized. Campus improvements include assets such as parking lots, fencing, cabling and networking between buildings, sidewalks, roads, drainage and sewer systems. Campus improvement project costs of $5,000 or more related to the construction or significant alteration, betterment, renewal or replacement of these assets should be capitalized. Costs incurred to maintain campus improvements in their existing condition would not be capitalized.

Buildings and Construction in Progress

All direct costs are included in the capitalized cost of the construction of a building. Direct costs include architectural, engineering and legal fees, permits and construction costs including costs of all structural components, interior and exterior finishing and permanently attached fixtures or equipment. Interest, net of corresponding income, incurred during the construction of debt-financed property is capitalized during the period of time to construct the asset to the time when the asset is ready for its intended use. Construction in progress is an asset category that is used when the asset under construction meets the capitalization threshold and the construction time crosses over two or more fiscal years. The construction in progress account is closed out to the capitalized asset when the project is substantially complete, occupied, or placed into service.

Leasehold Improvements

Costs to construct or renovate leased spaces are capitalized to leasehold improvements if they meet the same criteria as that specified for buildings or building improvements are capitalized. Moveable furniture with a cost of $5,000 or more that is not attached to the leased property is not considered a leasehold improvement and is capitalized with equipment.

Software

• Purchased Software Applications: Purchased software is capitalized when individual licenses equal $5,000 or more and the software is expected to have a useful life of more than one year. Expenses related to maintenance, support and training are expensed.
• Internally-Developed Software or Website Development: Costs related to internally-developed software or website development are capitalized or expensed depending on the nature of the costs and the stage of development. Generally, all costs incurred during the preliminary or planning stages are expensed. These costs may include developing a project plan; determining the functional requirements and technical requirements; identifying the internal and external resources needed; and exploring alternative means of achieving functional and technical requirements. Costs incurred during the application development stage or graphics development stages, such as the purchase of software or design and layout expenses may be capitalized. Post-implementation maintenance or costs of operating a website are expensed.

Exceptions to Per Item Thresholds

For new construction, renovations or remodeling projects where the total cost of the furnishing and/or equipment exceeds [$25,000], the $5,000 threshold is waived for the purchase of movable equipment and furnishings provided following requirements are met:

• During the normal course of business, these items would be expensed solely because they did not meet ÌÇÐÄÆƽâ°æ’s $5,000 capitalization threshold. This exception allows for the capitalization of an original complement of low-cost equipment, furnishings, computer and IT equipment, media and network equipment as part of the outfitting of a tangible capital asset or operational unit, or an expansion, renovation or remodeling.

Pooled Asset

A pooled asset is defined as a group of assets comprised of primarily – defined as at least 85% of the same category type (furniture, equipment, computers, media equipment, network equipment or fixtures) that individually do not meet the capitalization threshold but are purchased in a large quantity for a specific space that will transform or upgrade the space. The pooled asset method provides for small dollar/large quantity assets to be appropriately reflected on the financial statements without imposing the unnecessary tracking of reach asset individually as a practical expedient. All purchases handled under the pooled asset method are to be capitalized into a pool that is given a unique name for tracking purposes. The cost should include full acquisition cost, including items such as design costs, outside installation costs, furniture assembly, freight charges and insurance. The total cost of the pooled assets must be greater than [$25,000].

Library Books

Purchases of library books are recorded at cost on a quarterly, composite basis.

Art Collections

Works of art are primarily comprised of paintings and sculptures and are displayed throughout the campus. Works of art are not capitalized or recorded in the University’s financial statements.

Definitions

This policy does not have definitions associated with it at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.

Forms

This policy does not have forms associated with it at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.

Related Information

This policy does not have related information at this time. Upon periodic policy review this area will be evaluated to determine if additional information is needed to supplement the policy.

Document History

• Last Reviewed Date: July 9, 2026
• Last Revised Date: July 9, 2026
• Policy Origination Date: Not known

Who Approved This Policy

Michael Rhattigan, Chief Financial Officer