| VOLUME: I |
POLICIES RELATED TO ACCOUNTING ADMINISTRATION |
| SUBJECT: |
Capitalization of Land Improvements |
| SOURCE: |
Financial Management Serivces, American Institute of Public Accountants (AICPA) Guidelines for Colleges and Universities, GAAP
|
| DATE ISSUED: |
July 2002 |
| POLICY NO.: |
I-215 |
| RATIONALE: |
To define expenditures which will be classified as land improvements. |
| POLICY: |
Capital land improvements are those items which have a life of their own exclusive of the land or building(s) should be capitalized in this category.
The cost of the project must be greater than $75,000 for it to be capitalized.
|
| DEFINITIONS: |
Land Improvements as defined in GASB 34 Implementation guide are expenditures for improvements to the land, other than buildings or infrastructure, that ready land for its intended use.
Examples include site excavations and improvements; removal or reconstruction of others’ property; retaining walls; fencing and landscaping.
|
| PROCEDURE REFERENCE: |
In order for an item to be secured as a land improvement, the correct object code should be utilized on the Purchase Order and disbursement documents.
All capitalized building projects should be processed through a construction account or renewal and replacement account and should not be recorded in an operating account. Any federal funds used should be allocated to the correct disbursement object code.
A list of the current object codes (income and expense classes) is available by contacting your campus Chart Manager (see listing; http://www.fms.indiana.edu/) or the Financial Information System’s Object Code References Tables.
|
| CROSS REFERENCE: |
For more detail and definition on this policy, refer to the Indiana University Capital Asset Manual, Accounting for Assets at Indiana University, URL: http://www.fms.indiana.edu/cams/Manual/Manual.asp distributed by the Financial Management Services department.
See Accounting Administration Policy I-190, Capitalization of Buildings, I-200, Capitalization of Land,
I-210, Capitalization of Infrastructure.
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| RESPONSIBLE ORGANIZATION: |
Financial Management Services |
