Chapter 2. Accounting Services
Section 2.2. Fund Principles

2.2.6. Plant Fund

Plant Fund: A fund maintained for transactions relating to investment in physical properties, indebtedness incurred in the financing thereof, and reserves for maintenance and replacement.

2.2.6.1. Capitalization of Physical Assets

Capitalization of Physical Assets: Physical property (assets) acquired by the University via purchase, gift, or trade and which take the form of land, land improvements, buildings, equipment and/or other tangible items. Physical properties owned by the University are divided into the following general categories:

1. Land and land improvements, including construction-in-progress relating to land improvements.



2. Buildings, including construction-in-progress.



3. Equipment, including but not necessarily limited to furniture, fixtures, scientific and office equipment, vehicles, instruction aids, etc. Individual items classified as equipment must have a unit cost of $2,500 or more and have a life expectancy of at least three years.



4. Library books, mineral specimens, etc.

All costs of obtaining possession of, and clear title to, physical assets in the condition in which it is to be used, are recognized as legitimate elements to be capitalized. The primary reasons for capitalizing physical assets by the University are as follows:

1. To maintain control over those assets.



2. To properly report, via published financial statements and other media, the value and custodianship of the physical plant assets of the University.