Financial Services

Financial Services

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Capitalization Policy

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:

  1. are held for use in the provision of services, for administrative purposes, for production of goods or for the maintenance, repair, development or construction of other tangible capital assets;
  2. have been acquired, constructed or developed with the intention of being used on a continuing basis;
  3. are not intended for sale in the ordinary course of operations; and
  4. are not held as part of a collection

Intangible assets are identifiable non-monetary assets without physical substance. They are separately identifiable and controlled, and have future economic benefits.

Application at Queen’s University

Recognition and measurement

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.

Asset Classification

Capital assets should be categorized into one the following classifications:

  • Land
  • Buildings
  • Equipment and furnishings
  • Library acquisitions
  • Construction in progress
  • Intangible assets

Capitalization Policy thresholds

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)
Buildings 40
Cogeneration Facility 20
Equipment and Furnishings 5
Intangible assets 5
Library books 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