Policies & Procedures Manual - Elizabeth City State University

400.1.48Using In-House ResourcesIf you are using in-house resources from Facilities Management such as labor, materials, andsupplies to construct or add on to a building, the costs should be included as part of the cost ofthe asset. Capitalize the costs as if outside sources were used. You must determine if the buildingmeets the $500 inventory threshold or the $5,000 capitalized threshold. Remember to include thecost of the In-House resources in the total cost of the building.Additional ConstructionIf an addition is constructed, it is added to the fixed asset system as a separate asset. If theadditional construction exceeds the $500/$5,000 threshold is should be assigned its own FixedAsset Number.Renovation and Improvement CostsRenovation and Improvement Costs are incurred to restore or improve buildings or othercapitalized assets acquired in a run down condition. Property to be renovated and improved isusually purchased at a discounted price. The reason for the lower price is that considerablemoney will need to be spent to renovate/improve the asset before it can be put into service. Therenovation/improvement costs incurred are added to the Fixed Assets System as a separate assetif the cost meets the $500/$5,000 threshold. Normally the costs take place over an extendedperiod or time. Care must be taken to distinguish between maintenance costs andrenovation/improvement costs over the period. (Please see Policy 400.1.65)Maintenance ExpensesMaintenance expenses are incurred to keep assets in normal operating condition. Maintenanceexpenses are incurred to help maintain the original use of the building and do not extend the lifeof the building beyond the expected useful life at acquisition. Maintenance costs are expensedand not capitalized. The costs are charged to Repairs and Maintenance -- Expenditure Code3500.(Please See Policy 400.1.66)