UCAR Property Office - Fixed Asset Capitalization Decision Tree

(DPA guidance documents. Non-DPAs contact your DPA).

FIXED ASSET (FA) CAPITALIZATION* DECISION TREE

I have an asset for which I am making an additional purchase. May I capitalize the new purchase? To determine if the item qualifies for capitalization, answer the questions below.

1. Are you removing something from the asset and replacing it with something else?

NO

Refer to Add-On
Decision Tree
(see link below)

Yes
Go on to question 2

2. If the current asset cost is $5K-$50K, is item cost 10%+ of current asset cost
($1K minimum)?

If the current asset cost is >$50K, is item cost $5K+?

NO

EXPENSE
Not a Capital Asset

YES
Go on to question 3

3. Will the item be permanently and intrinsically tied to the FA for the duration of the FA's UCAR-life? NO
EXPENSE
Not a Capital Asset

YES
Go on to question 4

4. Will this asset now perform a function or provide additional capabilities it was unable to perform previously?
(This is a new function, not an enhancement of a function performed previously)

NO
EXPENSE
Not a Capital Asset

YES
Read paragraph below

The additional purchase may be included in the cost of the FA and depreciated. Issue a requisition using a 55xx object code and reference the existing FA PPE tag number. Fill out a Capitalization form, documenting the functionality of the asset and how it will perform with the new purchase, and send it to the Property Office. To access the form, click on the link below that says "Capitalization Form."

If there is any question, please contact the Property Office.

*Capitalization: The process of determining the value of property; i.e. costs charged to a 55XX object code, and/or the costs involved in Construction in Process (CIP).

Capitalization Form

Add-on Decision Tree

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