PCS 101: Plant Acquisitions
To outline the accounting classifications of plant acquisitions
All university agency/orgs
Plant acquisitions are divided into three categories:
- improvements to land other than buildings
- Acquisition by Purchase. Land purchased by the
university is recorded at cost. Cost includes land; legal, title,
and broker’s fees; landfill; and clearing, grading, and other
costs necessary to prepare the land for its intended use.
- Acquisition by Gift or Bequest. Recorded at the fair
market value at the date of the gift (appraisal usually has been
- Acquisition through Eminent Domain. Recorded at the
amount of the court award made to the landholder(s).
Improvements to Land Other than Buildings
This category consists of land improvements outside the
building. Improvements to land other than buildings, which are
required to make land ready for its intended use, are capitalized if the total
expenditure is $100,000 or more per project.
This category includes roads, walkways, tunnels, utility
facilities, drainage systems, landscaping, parking lots, tennis
courts, athletic fields, fences, curbs, streetlights, and similar
- Buildings. The cost of buildings (permanent structures
housing persons and personal property) is the construction cost of
the building shell and its components. Examples of construction
costs include, but are not limited to, building materials,
building permit fees, subcontract fees,
rent for property, to complete construction,
operating and maintenance costs for property, site preparation, compensation for work performed,
and cost of supplies consumed in the construction. Capitalization
of associated costs takes place as the costs are incurred.
- Building Components. Building components are items
permanently attached to the building shell necessary for the
building to be used as intended. Building components are either
integral to the building or cannot be removed without damaging the
building or component. Examples of building components are plumbing
systems, electrical wiring, and air-conditioning duct work.
- Building Additions. New additions to buildings resulting in
additional square footage are capitalized regardless of the dollar
- Renovations. Major building component replacements or
renovations of a building that extend the original life of the
building and/or increase its value to the university are
capitalized for projects involving expenditures of $100,000 or more.
- Demolition Costs. The cost of building demolition in
preparation of new construction is added to the cost of the new
building as “site preparation costs.” If new
construction is not planned, the demolition costs are not
- Planning. Professional services and fees incurred with
construction and remodeling (e.g., architects’ fees, construction
and management fees, and engineering studies).
- Building Fixtures. Fixtures must be able to be removed without extensive alterations to the building structure and cannot be so affixed as to be legally considered part of the real property. Examples include carpeting, shades, shelving, bulletin boards, and lab benches bolted to the floor. These are capitalized if the total expenditure is $100,000 or more, per project.
For information on the use of capital object codes, see the
Financial Services Policies and Procedures
430–01, “Overall Expenditure Coding
skip navigation bar
PCS manual |
ASU policies and procedures manuals | Index of Policies by Title |
PCS manual contact |
Property Control Web site