fsu.edu | Construction Accounting Policy

OP-D-2-A CONSTRUCTION ACCOUNTING CAPITALIZATION

OP-D-2-A1 OBJECTIVE
To establish accounting guidelines for all University construction remodeling and renovation projects that are consistent with generally accepted accounting principles.

OP-D-2-A2 DEFINITIONS
New Construction:
Any construction of a building or unit of a building in which the entire work is new or an entirely new addition connected to an existing building. (Florida Statutes 235.011)

Remodeling:
The changing of existing facilities by rearrangement of spaces and their use and includes, but is not limited to, the conversion of two classrooms to a laboratory or the conversion of a closed plan arrangement to an open plan configuration. (Florida Statutes 235.011)

Renovation:
The rejuvenating or upgrading of existing facilities by installation or replacement of materials and equipment and includes, but is not limited to, interior or exterior reconditioning of facilities and spaces; air conditioning, heating, or ventilating equipment.

Maintenance and Repair:
The upkeep of educational and ancillary plants excluding renovation and including, but not limited to, roof or roofing replacement of membrane or structure; repainting of interior or exterior surfaces; resurfacing of floors; repair or replacement of glass; repairs of hardware, furniture, equipment, electrical fixtures, and plumbing fixtures; and repair or resurfacing of parking lots, roads, and walkways. (Florida Statutes 235.011)

Fixed Capital Outlay (FCO):
Real property, (land, buildings, fixed equipment, structures, etc.) including additions, replacements, major repairs, and renovations to real property which materially improve or change its functional use. (Florida Statutes 216.011)

OP-D-2-A3 POLICY

In accordance with generally accepted accounting principles the University will capitalize:

1. All new construction projects which add square footage to Florida State University facilities.

2. Material remodeling and renovation projects. In general, materiality for remodeling and renovation projects will be defined as those whose total cost is $100,000 or greater. Total cost will include all professional fees, contingencies, materials, etc. associated with the project but exclude tangible personal property (OCO).
Maintenance and repairs projects and remodeling and renovation projects costing less than $100,000 will be charged to the current period and excluded from the fixed assets records. The Associate Controller may override the $100,000 threshold should a determination be made that the completion of the project will substantially extend the useful life of the facility. Tangible personal property (OCO) are not to be included in the evaluation of project costs for capitalization purposes.


	Business Operations Facilities/Space Faculty & Staff Financial General University Records/Information Safety/Insurance Technology			OP-D-2-A CONSTRUCTION ACCOUNTING CAPITALIZATION OP-D-2-A1 OBJECTIVE To establish accounting guidelines for all University construction remodeling and renovation projects that are consistent with generally accepted accounting principles. OP-D-2-A2 DEFINITIONS New Construction: Any construction of a building or unit of a building in which the entire work is new or an entirely new addition connected to an existing building. (Florida Statutes 235.011) Remodeling: The changing of existing facilities by rearrangement of spaces and their use and includes, but is not limited to, the conversion of two classrooms to a laboratory or the conversion of a closed plan arrangement to an open plan configuration. (Florida Statutes 235.011) Renovation: The rejuvenating or upgrading of existing facilities by installation or replacement of materials and equipment and includes, but is not limited to, interior or exterior reconditioning of facilities and spaces; air conditioning, heating, or ventilating equipment. Maintenance and Repair: The upkeep of educational and ancillary plants excluding renovation and including, but not limited to, roof or roofing replacement of membrane or structure; repainting of interior or exterior surfaces; resurfacing of floors; repair or replacement of glass; repairs of hardware, furniture, equipment, electrical fixtures, and plumbing fixtures; and repair or resurfacing of parking lots, roads, and walkways. (Florida Statutes 235.011) Fixed Capital Outlay (FCO): Real property, (land, buildings, fixed equipment, structures, etc.) including additions, replacements, major repairs, and renovations to real property which materially improve or change its functional use. (Florida Statutes 216.011) OP-D-2-A3 POLICY In accordance with generally accepted accounting principles the University will capitalize: 1. All new construction projects which add square footage to Florida State University facilities. 2. Material remodeling and renovation projects. In general, materiality for remodeling and renovation projects will be defined as those whose total cost is $100,000 or greater. Total cost will include all professional fees, contingencies, materials, etc. associated with the project but exclude tangible personal property (OCO). Maintenance and repairs projects and remodeling and renovation projects costing less than $100,000 will be charged to the current period and excluded from the fixed assets records. The Associate Controller may override the $100,000 threshold should a determination be made that the completion of the project will substantially extend the useful life of the facility. Tangible personal property (OCO) are not to be included in the evaluation of project costs for capitalization purposes.