Policies & Procedures Manual - Elizabeth City State University

400.1.48Adopted: 06/14/05ELIZABETH CITY STATE UNIVERSITYFixed Assets- BuildingsDefinitionBuildings are structures that are permanent in nature. They will exist for more than one year and,depending on the funding used for the purchase, may be subject to depreciation (proprietaryfunds).ValuationBuildings are valued at the purchase price or construction cost. Cost should include all chargesapplicable to the building (i.e. broker's fees, architect's fees, interest on construction, etc.).Permanently attached fixtures to the building (i.e. heating and ventilation systems) should beincluded in the cost of the building. Buildings valued at $5,000 or above should be capitalized.Building valued below $5,000 should be expensed. Buildings valued above $500 will be listed inthe Fixed Assets Automated System. Building valued between $500 $4,999 will classified asInventoried Buildings and Buildings costing $5,000 or more will be classified as CapitalizedBuildings.Donated BuildingsIf a building is donated, it should be recorded in the Fixed Assets System and, if its costs meetthe $5,000 threshold, capitalized in the Financial Records System at the appraised fair marketvalue at the time of the donation. The Fair Market Value is defined as the estimated amount ofthe asset for which it would be exchanged between a willing buyer and seller when neither areforced into the exchange.Leased BuildingsBuildings that are leased follow the same policy as other fixed assets. The type of lease as wellas the $500/$5,000 thresholds dictate whether a building is both recorded in the Fixed AssetsSystem and Capitalized in the Financial Records.