Building Capitalization Policy

Directive Statement

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.

Procedures

In accordance with statutory provisions and generally accepted accounting principles, the University will capitalize and include in its real property records the following:

1. The original cost to construct new buildings
2. The costs related to renovation projects which adds new square footage
3. 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

Contacts

Construction Accounting: (352) 392-5778

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