To establish guidelines to define depreciable assets, determine useful lives, and the method of allocating depreciation costs in accordance with Governmental Accounting Standards Board Statement No. 34.

This Policy applies to all West Virginia University departments, including those on the regional campuses (Potomac State College of WVU, WVU at Parkersburg, WVU Institute of Technology, Charleston division of the Robert C. Byrd Health Sciences Center, Jackson’s Mill State 4-H Conference Center and Camp, and the WVU Farms).

 POLICY

Depreciation is the allocation of the total acquisition cost of a fixed asset over its estimated useful life. Land, construction-in-progress, and inexhaustible works of art, collectibles and similar assets are not depreciated. Annual depreciation expense is calculated using the straight-line method by dividing total asset cost by estimated useful life in years. The estimated useful life of a depreciable asset is the period over which services are expected to be rendered by the asset. A full-month convention is used, that is, property placed in service at any time during a given month is considered to be placed in service on the first day of that month. This allows depreciation to be allocated for the entire month in which the asset is placed in service while no depreciation is allowed for the month of disposition. Salvage value of depreciable assets is assumed to be zero, except for vehicles which have a salvage value of 20%.

As many factors may affect the useful life of an asset, a periodic review of estimated useful lives will be performed.

The Capital Assets and Debt Accounting Unit of Accounting & Financial Systems is responsible for procedure development.

The responsibility for implementation and interpretation of this policy rests with the Capital Assets and Debt Accounting Unit of Accounting & Financial Systems.

West Virginia University’s Capitalization Policy provides definition of capital assets and the total cost of an asset. The Higher Education Depreciation Setups document provides the estimated useful lives of depreciable assets.

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