Land purchased by the university is recorded at cost. The cost includes legal, title, and broker's fees, landfill, clearing, grading, and other costs necessary to prepare the land for its intended use. This category consists of land improvements outside the periphery of the building. The capitalization criteria are the same as those used for building capitalization . Examples of construction costs include, but are not limited to, building materials, architects' fees, building permit fees, subcontract fees, rent for property to complete construction, operating and maintenance costs for property used in the construction, site preparation, compensation for work performed, and the cost of supplies consumed in the construction.
Capitalization takes place as construction costs are incurred.
Building components are items permanently attached to the building shell necessary for the building to be used as intended. Building components are items that cannot be removed from the building without damaging the building or component. Examples of building components are plumbing systems, electrical wiring, air-conditioning duct work, and windows. If new construction is not planned, the demolition costs are not capitalized. Procedure Property Control establishes a separate and complete inventory record for each distinct unit of real property.