Capitalization Policy

Purchases of furniture, automobiles, equipment and library books with an item price of $3,000 or more and a useful life of more than one year are capitalized. Group purchases with a value of $5,000 or more are also capitalized. All desktop and laptop purchases are capitalized since they are considered to be part of a group purchase.

Peripheral hardware purchases for items such as printers or memory upgrades are expensed unless the individual purchase meets the capitalization threshold. Mattresses, painting, reupholstering and draperies are not capitalized unless part of a major building project (see below). Permanent building improvements as differentiated from routine maintenance are capitalized using the same guidelines above. Examples of capitalized building improvements include, but are not limited to, electrical upgrades, replacement windows, roofs, siding, heating and air conditioning units and campus signage. Replacement carpeting is generally expensed unless a component of a new building or a part of an extensive renovation to a particular building.

All component costs of new construction including additions to existing buildings are capitalized.

Fixed asset lives are assigned by Asset Type and are classified as follows:

Land Improvements20
Buildings50
Building Improvements20
Leasehold Improvementsover remaining term of lease
Library Books10
Gen Equipment & Telephone10
Furniture & Fixtures7
Vehicles7
Computers5
Computer Software3

The capitalization policy will be reviewed annually.