West Virginia University Policy
Division of Administration and Finance

WVU-A&FS-4

CAPITALIZATION POLICY

To establish a uniform capitalization policy for equipment and fixed assets that complies with federal, state, and West Virginia University (WVU) reporting requirements.

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).

For Financial Statement purposes the capitalization requirements are as follows -

1. Movable Equipment having a useful life of one year or more and a total acquisition cost of $5,000 or more per single unit. A single unit is defined as a piece of equipment, that when assembled, functions as a stand-alone unit. (See addendum - Treatment of Grant-Funded Assets During Fiscal Year 2003.)

Leased Equipment if it meets the capitalization criteria of Statement of Financial Accounting Standards No. 13. Please see the definition of Leased Assets in Appendix A.

Donated Equipment having a useful life of one year or more and fair market value of $5,000 or more.

2. Buildings, Building Improvements, Land Improvements and Infrastructure having a useful life of one year or more and a cost of $25,000 or more.

Leased Buildings if they meet the capitalization criteria of Statement of Financial Accounting Standards No. 13. Please see the definition of Leased Assets in Appendix A.

Donated Buildings having a useful life of one year or more and fair market value of $25,000 or more.

3. Computer Software having a useful life of one year or more and a cost of $25,000 or more per license.

Leased Computer Software if it meets the capitalization criteria of Statement of Financial Accounting Standards No. 13. Please see the definition of Leased Assets in Appendix A.

4. Leasehold Improvements having a useful life of one year or more and a cost of $25,000 or more.
   
   
5. Land is capitalized irrespective of cost.
   
   
6. Library Books, Reference Materials and Resources are capitalized irrespective of cost.
   
   
7. Federally Owned and Other Party Owned Assets are not capitalized unless the title to the asset is transferred to WVU. In that case such assets are capitalized at their fair market value (net book value at the time of transfer).
   
   
8. Works of Art, Literature and Historical Treasures are not capitalized.
   
   
9. Repairs and Maintenance related expenditures are not capitalized.

PROCEDURE

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.

Appendix A of WVU'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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