XIV. Special Procedures

Guide to Financial Operations

XIV.14.D Criteria for Recording General Capital Assets Including Infrastructure

XIV. Special Procedures
Guide to Financial Operations

General capital assets, consisting of tangible and intangible assets, should be capitalized when all of the following criteria are met:

Tangible Assets

  • The asset is tangible in nature, complete and is not a component part of another item.
  • The asset is used in the operation of the State's activities.
  • The asset has a useful life of two years or more and provides a reasonable benefit throughout that period.
  • The individual asset is of significant value (the State will use the following guidelines):
    • All Land
    • Buildings
    • Machinery and Equipment in excess of $40,000
    • Office Furniture and Equipment in excess of $40,000
    • Building and Land Improvements and Renovations in excess of $100,000
    • Library Books in excess of $5,000
    • Works of Art and Historical Treasures in excess of $40,000
    • Infrastructure Assets in excess of $1,000,000

For major construction projects, the $100,000 capitalization limit should apply to the total capital expenditures rather than the individual assets. For bulk purchases of furniture, equipment, etc., the individual assets must exceed $40,000 to be capitalized.

Intangible Assets 

  • An intangible asset is an asset that lacks physical substance, is non-financial in nature, and has an initial useful life extending beyond a single reporting period.
  • Intangible assets must be identifiable to be reported. They are identifiable if either of the following conditions is met:
    • The asset is separable – capable of being separated or divided from the government and sold, transferred, licensed, rented or exchanged.
    • The asset arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.
  • For intangible right-to-use lease and subscription-based information technology arrangement asset capitalization thresholds, refer to Chapter XVI – Section 4.O.
  • For other types of intangible assets, the State will capitalize assets with values in excess of $1,000,000.


Guide to Financial Operations

REV. 11/15/2023