1. Moveable Equipment
2. Capital Lease
3. Moveable Fabricated Equipment
4. Art & Museum Objects
5. Land
6. Land Improvements
7. Bond Issuance
8. Buildings
9. Infrastructure
10. Library Books
11. Leasehold Improvements

1. Moveable Equipment

An item must meet two specific criteria in order to qualify as a capital purchase. It must have (1) an acquisition value of at least $5,000.00 and (2) a useful life expectancy of one year or greater.

Generally equipment that is attached to a building is capitalized as moveable equipment when removing the equipment does not cause structural damage to the building and will not destroy the equipment.

The term "equipment" includes delivery equipment, office equipment, machinery, furnishings, factory equipment, and similar fixed assets¹.

Acquisition cost of moveable Equipment:


1. Examples of service cost that can be capitalized with equipment purchases may include:
1. Cost of assembling the asset
2. Cost of installation
3. Freight
4. In-transit Insurance
5. Preparing the site and asset for its intended use
6. Training
2. When additional equipment is received on a purchase order at no cost, these items are considered gifts to the university. These gifts will be taken into consideration when assigning the unit cost of line items on the purchase order. The total quantity (including gifts) will be divided by the invoice amount. If the gift takes the unit cost below the capitalization threshold the expenses will be reclassified to supplies and expense.
3. Assets are recorded net of cash and other earned discounts. In addition, a trade-in allowance will result in the reduction of the acquisition value.

The following are not considered capital equipment regardless of cost or useful life:


1. Repair or replacement parts. (See S&E object codes, for example, 4700- Repair & Maintenance or 4776 -Service Maintenance Contracts.)
2. An item or substance that has no shape or identity, or loses that shape or identify upon detachment or removal from its original location. (See S&E object codes, for example, 5200- Expendable Equipment.)
3. Maintenance and Warranty agreements (See S&E object codes, for example, 4776 - Service Maintenance Contracts.)
4. Software license agreements are not capitalized unless ownership is indicated within the license agreement. Software license agreements not indicating ownership should be expensed to object code 4616 - Computer Software Purchases.

Following is a listing of moveable equipment object codes:


Object Code	Description
7000	Capital Equipment
7015	Computer Equipment
7016	Computer Software
7030	Capital Equipment - Federally Funded
7031	Capital Equipment - Federally Owned
7032	Capital Equipment - Non-IU or Fed Owned
7035	Computer Equipment - Federally Funded
7036	Computer Equipment - Federally Owned
7045	Computer Software - Federally Owned
7070	Trade-in Capital Equipment

(See CSOP 8.0 Capitalization of Moveable Equipment)

2. Capital Lease

A lease purchase is a contractual agreement conveying the right to use property, plant, or equipment usually for a stated period of time. A lease agreement involves at least two parties, a lessor and a lessee. The lessor agrees to allow the lessee to use the item for a specified period of time in return for periodic payments. There are two types of lease purchases available; an operating lease and a capital lease.

An operating lease includes a lessor (vendor), who collects rent, and a lessee (the university), who uses the leased equipment and pays periodic rent for such use. The lessee (the university) merely uses the equipment; there is no transfer of ownership, or any risk of benefit of ownership.

A capital lease transfers substantially all of the benefits and risk inherent in ownership to the equipment to the lessee (the university).

A "Capital Lease" purchase is the act of acquiring assets by making periodic payments, which generally consist of principle and interest.

Following is a listing of object codes for a capital lease agreement:

Object Code	Description
7099	Capital Lease
4400	Interest

An operating lease should use a rental object code such as 4620.

3. Moveable Fabricated Equipment

The term "Fabrication" is used in conjunction with moveable equipment and should not be confused with building construction projects. The transaction type of "Fabrication" identifies payments as construction in progress. A fabrication is a moveable asset created (built) by a university organization. A Fabrication Request document generates the asset number that is required when the Fabrication "CAMS Tran Type" is selected. Therefore the organization must submit a Fabrication Request document prior to any purchases.

Following is a listing of fabrication capital object codes:

Object Code	Description
7500	Capital Equipment-University Constructed
7530	Capital Equipment - Federally Funded
7535	Capital Equipment Univ. Const. Computer Equip. Fed Fund
7531	Capital Equipment-Univ. Construct-Fed Owned

(See CSOP 12.0 Fabricated Equipment)

4. Art & Museum Objects

Art and museum objects are non-depreciable pieces purchased or donated to the university. Art and museum pieces shall be capitalized if the value is $5,000 or greater. If a collection is greater than $5,000 then it will be capitalized as a collection.

Following is a listing of capital art and museum object codes:

Object Code	Description
7600	Art & Museum Objects
7677	Art & Museum Objects Gifts

Please contact your fiscal officer to determine the appropriate expense object code for purchases of art and museum objects below the capitalization threshold amount.

5. Land

Land is non-depreciable property purchased by the university.

There is no capitalization threshold as to the total cost spent for land.

All costs incurred in acquiring land or getting the land ready for its intended use should be considered as part of the land cost. These expenditures shall include (1) the purchase price, (2) closing costs such as title to the land, attorney's fess and recording fees, (3) costs incurred in getting the land in condition for its intended use, such as grading, filling, draining, and clearing and (4) the assumption of any mortgages or liens. Any other land improvement shall also be considered a land capital expenditure if it increases the utility.

If both a building and land are purchased the cost of the land should be capitalized separately from the building cost.

Following is a listing of land capital object codes:

Object Code	Description
7200	Land
7201	Land Demolitions
7277	Land Gifts

Please contact your fiscal officer to determine the appropriate expense object code for purchases of land below the capitalization threshold amount.

6. Land Improvements

Capital land improvements are those items which have a life of their own exclusive of the land or building(s) and are considered betterments to the property.

The cost of a land improvement project must be $75,000 or more to be capitalized. A land improvement project could include cost for (1) yard improvements such as yard lighting, exterior lighting, fencing, gates and parking barriers, and (2) landscaping improvements such as parking lot lights, paths, fountains, sculpture gardens and athletic fields.

Following is a listing of land improvement capital object codes:

Object Code	Description
7465	Land Improvements - Yard, Fencing & Barriers
7466	Land Improvements - Landscapings
7467	Land Improvements - Septic Systems
7468	Land Improvements - Professional Fees
7477	Land Improvements -Gifts

See Repair & Maintenance object codes such as 4700 for land improvement projects not meeting the capitalization threshold.

7. Bond Issuance

During the bonding process bond issuance costs are incurred. These costs include underwriters' fees and insurance fees. All qualifying bond issuance costs are capitalized regardless of the dollar value.

Following is the object code used for bond issuance costs:

Object Code	Description
7329	Bond Issuance

8. Buildings

Expenditures per building for new construction, alterations or renovations must be Seventy-five Thousand Dollars ($75,000) or greater to be capitalized.

The costs per building project include expenditures related directly to their acquisition or construction. These costs include (1) materials, labor and overhead costs incurred during construction, (2) professional fees and building permits. All direct costs incurred from excavation to completion are considered part of the building project.

Following is a listing of building capital object codes:

Object Code	Description
7300	Building & Attached Fixtures
7301	Building - Professional Fees
7303	Building - Improvements
7377	Building - Gifts

See Repair & Maintenance object codes such as 4700 for new construction or renovations not meeting the capitalization threshold.

9. Infrastructure

Infrastructure assets are long lived assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.

The costs associated with infrastructure projects must be $75,000 or more per project to be capitalized. An infrastructure project could include cost for (1) street improvements such as traffic, street and walkway lights, street signage and guard rails, (2) road and waterway construction such as roads, streets, highways, alleys, sidewalks, curbs, culverts, and bridges, (3) underground distribution and collection systems and (4) telephone communication systems.

Following is a listing of infrastructure capital object codes:

Object Code	Description
7400	Infrastructure Improvements
7402	Infrastructure Professional Fees
7401	Infrastructure Wire Center Tele System
7403	Infrastructure Wire Closet Tele Systems
7404	Infrastructure Conduit Tele System
7405	Infrastructure Switch Room Tele System
7406	Infrastructure Contractual Tele System
7408	Infrastructure - Street Improvements
7409	Infrastructure - Road/Waterway Improvements
7410	Infrastructure - Underground Dist & Collection Sys
7411	Infrastructure - Telephone Communications

See Repair & Maintenance object codes such as 4700 for infrastructure projects not meeting the capitalization threshold

10. Library Books

All cataloged library acquisitions shall be capitalized. There is no capitalization threshold as to the total cost spent per unit. Departmental purchases of manuals or other professional guides not cataloged in the university library system will not be capitalized.

Following is a listing of library book capital object codes:

Object Code	Description
7100	Library Books
7177	Library Books Gifts

11. Leasehold Improvements

Leasehold improvements can be made to property that is leased by the university. Leasehold improvements represent physical enhancements made to property by or on behalf of the university. The university does not own the property but has chosen to lease the property and to incur leasehold improvements. When improvements are made to the leased property and those improvements are permanently affixed to the property, the title to those improvements transfer to the owner of the property at the end of the lease term.

To be capitalized as leasehold improvements the total cost of the improvements to the leased space must be $75,000 or more. The capitalized costs incurred by the university in constructing leasehold improvements to property that is leased represents an intangible asset or a license to use the improvements.

Following is a listing of leasehold improvement capital object codes:

Object Code	Description
7800	Leasehold Improvements
7801	Leasehold Improvements Professional Fees

See Repair & Maintenance object codes such as 4700 for leasehold improvements not meeting the capitalization threshold.

Depreciation. The periodic charge to income that results from a systematic and rational allocation of cost over the life of a tangible asset.

Equipment. The term "equipment" includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.