602.1 Building Component Depreciation & Allocating Capitalized Costs

BUILDING COMPONENTS: PSU has 19 building components that are grouped into four general components of a building. The four general components and the 19 building components (and their estimated useful life) to be used for building component depreciation are include the procedures manual. 

ALLOCATING CAPITALIZED COSTS TO BUILDING COMPONENTS: For buildings to be componentized, PSU does not require and nor is it expected to split the payment of each invoice into individual building components. Instead, the building's total capitalized cost is to be allocated to the individual building components when the building is recorded in Banner Fixed Assets as a "substantially completed building." "Substantially complete" means receipt of an unconditional certificate of occupancy from the appropriate state and/or local building officials and the majority (i.e. 98%) of the expenditures related to the project have been paid.

At the time of recording the asset as a "substantially completed building," PSU will determine if the building is to be componentized. If the building is to be componentized, the actual costs from the schedule of values for that building construction will be used to determine the amount for each of the building components shown above. Addition or capitalized improvement costs will be determined from contractor invoices or the schedule of values.

For more information, please see the procedures manual.