FINANCIAL MANAGEMENT POLICY MANUAL

sustainment, restoration and modernization projects on existing facilities
as an expense. Major sustainment, restoration and modernization projects
will be expensed in the period in which they occur. Expenses reflected in
the operating budget will be consistent with the revenue recognition policy
discussed in Par. 074603.6.
2. CAPITAL BUDGET.
The capital budget includes depreciable property, plant, equipment, and
software developed, manufactured, transferred, or procured for use by
NWCF activities with a determinable cost of $100,000 or more, and
having a useful life of two years or greater.
a. Capital assets.
Capital assets include information systems and telecommunications
equipment, and software development; other equipment; and minor
construction with a value of $100,000 or more, and having a useful
life of two years or greater. The $100,000 threshold is intended to be
consistent with congressional desires on the application of the
expense/investment criteria in the appropriated accounts.
Accordingly, determination of expense/investment shall exclude
transportation, design, installation, and other related costs. However,
these additional costs will be included as part of the total cost of the
capital asset identified in the capital budget and will be included in the
amount depreciated or amortized over a predetermined period as
discussed in Par. 074603.4.
b. Minor Construction.
Minor Construction projects costing $100,000 or more, but less than
$750,000, will be funded through the capital budget and depreciated.
Planning and design costs are considered a capital investment cost that
is capitalized by the NWCF activity and financed in the minor
construction portion of the capital budget. However, planning and
design costs are not included as part of the statutory threshold for
minor construction projects.
3. MILITARY CONSTRUCTION.
Military construction projects (i.e., construction projects costing more than
$750,000) will be budgeted and funded through the applicable Military
Construction appropriation. However, business areas will include the cost
of military construction projects in their capital budget as non-add entries
and will fully depreciate such projects in their operating budget.
(Change 67)
Financial Management Policy
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