Control of plant and related assets are the procedures and policies in place to reduce to a reasonable level, the risk of loss or misappropriation of resources or assets. This policy establishes asset valuation methods, and capitalization thresholds for property and related assets for financial reporting and cost accounting purposes. In addition, this policy sets forth guidelines for the minimal level of control for equipment, and requires institutions to establish a set of formal, written policies governing the control of plant and related assets, both capitalized and non-capitalized. Valuation principles outlined for buildings and building improvements also apply to infrastructure, land improvements and construction in process. All land acquired by purchase is recorded at cost to include the amount paid for the land itself and all related acquisition costs.
Land acquired by gift or bequest is recorded at the fair market value at the date of acquisition.
When land is acquired with buildings erected thereon, total cost is allocated between the two in reasonable proportion at the date of acquisition. If the transfer document does not show the allocation, other sources of the information may be used such as an expert appraisal or the real estate tax assessment records. This includes all buildings and permanent structures and all fixtures, machinery, and other appurtenances that cannot be readily moved without disrupting the basic building structure or services to the building. When buildings are purchased or acquired by gift or bequest, the basis of valuation is similar to that used for land. The cost or fair market value is allocated between the buildings and the related land.