7.5 Facilities and Other Improvements
7.5.1 Facilities Definition
Facilities are assets (other than general use buildings) that are built, installed or established to enhance the quality or facilitate the use of land for a particular purpose.
7.5.2 Other Improvements Definition
Other improvements are depreciable improvements made to a facility or to land that should be capitalized as betterments if the improvement is at the capitalization threshold, or the expenditure increases the life or value of the asset by 25 percent of the original life period or cost.
The improvement should be recorded as an addition of value to the existing asset using a parent/child asset management relationship. The useful life of the addition (the “child”) should generally not exceed that of the original asset (the “parent”). However, if the improvement is not an integral part of the original asset, it may possess a different useful life than the parent asset. The useful life of the parent may be modified to reflect an increase in useful life.
7.5.3 Depreciation Methodology
The straight-line depreciation method (historical cost less residual value, divided by useful life) will be used for facilities and other improvements.
7.5.4 Capitalization Threshold
The capitalization threshold for facilities and other improvements is $100,000. Examples of expenditures to be capitalized as facilities and other improvements include:
- Fencing and gates
- Signs at institution entrances
- Parking lots, driveways, parking barriers, etc.
- Lighting systems, such as for the campus, parking areas, streets, etc.
- Outside sprinkler systems
- Recreation areas and athletic fields, including bleachers
- Golf courses
- Paths and trails
- Septic systems
- Swimming pools, tennis courts, basketball courts, etc.
- Plazas and pavilions
- Retaining walls
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