Select this to enable text only view

5.01.002 - Capitalization

image image
Approved: 11/20/2012
Reaffirmed: 11/20/2012
Approved By: Board of Trustees
Section: 01 - FINANCE


Beginning with the 2002-2003 fiscal year, the College will be required to meet the reporting requirements of the Governmental Accounting Standards Board (GASB) Statements 34 and 35, “Basic Financial Statements – and Management’s Discussion and Analysis – for Public Colleges and Universities.”  In order to meet these financial reporting requirements, institutional policy for capitalization of assets must be defined.

Fixed Assets

  • For financial statement purposes, any asset acquired, donated, or purchased by the College, with a useful life of longer than one year, and a unit cost of $3000 or greater, will be capitalized and depreciated.  
  • A related group of assets acquired at the same time, with unit that values are less than $3000, but with a total value of $3000 or greater, will be considered as a unit, and depreciated. 
  • Assets with a useful life of over one year, but a value of less than the threshold, will be charged as an expense.

Value of Assets

  • Existing capital assets will be recorded at historical cost at acquisition date, or at estimated cost if adequate records are not available. 
  • Newly purchased assets will be recorded at cost. 
  • Donated assets will be valued at fair market value at date of receipt.


  • Depreciation will be calculated using the straight-line method with half-year convention, over the useful life of the asset or group of assets.

Useful Life

Guidelines for useful life, based on experience and circumstances (and subject to revision when necessary):

  • Land will be capitalized but not depreciated. 
  • Infrastructure will be depreciated over expected useful life.
  • Buildings will be depreciated over a life of 30 years.
  • Building Improvements that extend the useful life of the building will be depreciated over a life of 20 years.
  • Technology equipment, including computer hardware and software, will be depreciated over a useful life of 3 years.
  • Furniture, fixtures, and equipment not categorized as technology equipment, will be depreciated over a life of 7 years.

Depreciation expense is recognized for financial statement purposes only.  For budgetary purposes, the full cost of a capital asset is recognized at the time of acquisition.