Queen’s university capitalizes tangible and intangible capital assets.
Capital assets are tangible properties, such as land, buildings and equipment as well as intangible properties that meet all of the following criteria:
Intangible assets are identifiable non-monetary assets without physical substance. They are separately identifiable and controlled, and have future economic benefits.
Purchased assets shall be recorded at cost.
Donated assets shall be recorded at fair value at the time of receipt.
The cost of constructed assets shall include direct construction or development costs attributable to the construction or development activity.
Interest on financing shall not be included in the cost of assets developed over a period of time.
Capital assets should be categorized into one the following classifications:
Equipment and furnishings
Construction in progress
Items of equipment and furnishings, with a life expectancy of 1 year or more and a value of $10,000 or more are considered capital assets.
Intangible assets with a life expectancy of 5 years or more and a value of $500,000 or more are considered capital assets.
Leasehold improvements, and renovations and alterations that meet the definition of a betterment and have a value of $500,000 or more are considered capital assets. A betterment is a cost incurred to enhance the service potential of a tangible capital asset. Service potential may be enhanced when there is an increase in the previously assessed service capacity, associated operating costs are lowered, the useful life is extended, or the quality of output is improved. The cost incurred in the maintenance of the service potential of a tangible capital asset is a repair, not a betterment.
All library books are capitalized.
Land and buildings are considered capital assets unless they are being held only for resale, (which sometimes happens in the case of donated land or a donated building).
The cost, less any residual value, of a capital asset with a limited life will be amortized over its useful life. Assets are capitalized in the year of acquisition and amortized on a straight line basis over the useful life of the asset based on the following categories:
|Asset||Useful Life (years)|
|Equipment and Furnishings||5|
|Leasehold improvements||Term of lease|
A full year of amortization is taken in the year the asset is put into use. In the year of disposal, no amortization is taken.
Fully amortized assets are written off as follows:
Library books: After 20 years
Equipment and Furnishings: After 10 years
Software/Intangible Assets: After asset is no longer in use
Leasehold Improvements: End of the lease