Proprietary Funds Capitalization
Corresponding Policy: See ‘Fixed Assets General Accounting’ policy.
Corresponding Forms: N/A
Process: Deciding what Should be Capitalized and to what Account for Proprietary Funds
| Account Codes Used in Proprietary Funds | |||
| Type of Capital Asset | Capitalization Threshold | for PURCHASE | for CAPITALIZATION in Investment in Plant Fund |
| Equipment, Livestock, Vehicles, Vessels | Unit cost ≥ $5,000 | A8011 - Equipment (includes livestock) A8012 - Vehicles A8015 – Vessels | Same |
| Museum Collections | Total cost of museum collection ≥ $5,000 | A8031 - Museum Collections | Same |
| Works of Art and Historical Treasures | Unit or total cost of artwork ≥ $5,000 | A8032 - Works of Art & Historical Treasures | Same |
| Library Special Collections | Total cost of collection ≥ $5,000 | Not applicable to proprietary funds. | Not applicable to proprietary funds. |
| Library Purchases (General Books, not online subscriptions) | University library purchases are capitalized regardless of amount. Online subscriptions & departmental library purchases are expensed. | Not applicable to proprietary funds. | Not applicable to proprietary funds. |
| Land | All acquisitions of land are capitalized regardless of amount. Purchases of buildings require that a portion of the cost be allocated to land. | Land purchases may only be charged to unexpended plant funds (fund type 81). Account code 403xx, except 40303 and 40304 | A8121 - Land |
| Land Improvements | Land Improvements ≥ $75,000 | See Note 1 | A8123 - Land Improvements (non-depreciable) A8124 - Land Improvements (depreciable) |
| Buildings | All buildings ≥ $50,000 are capitalized. Purchases of buildings require that a portion of the cost be allocated to land. | See Note 1 | A8111 - Buildings |
| Buildings - Additions | Total cost of additions ≥ $100,000. | Construction of building additions are charged to unexpended plant funds (fund type 81) Account code 405xx | A8111 - Buildings |
| Buildings - Major Improvements | All major improvements - See Capitalization of Real Property - Additional Clarifications. | Account code 405xx See Note 1 | A8111 - Buildings |
| Buildings - Normal Repair and Maintenance | Not capitalized | Use a maintenance/repair 235xx account code. | Not capitalized |
| Buildings - Major Repair and Maintenance | Not capitalized | Use a maintenance/repair 235xx account code. See Note 1 | Not capitalized |
| Improvements other than Buildings (IOTBs) | IOTBs ≥ $50,000 | Account code 404xx. See Note 1 | A8131 - Improvement Other Than Buildings |
| Infrastructure | Infrastructure ≥ $75,000 | Account code 407xx. See Note 1 | A8141 - Infrastructure |
Additions or major improvements to IOTBs or infrastructure should be accounted for the same way as new IOTBs or new infrastructure.
Acquisitions of fixed assets not meeting the above capitalization thresholds should be recorded as an expense in the accounting records.
Note 1: Expenditure may only be made from fund types 11 - Budgeted Operations (fund series 004000), 81 - Unexpended Plant Funds and 83 - Renewal and Replacement Funds.