SUBJECT: |
Capitalization of Signage | ||||||||||||||||||||||||||||||
SOURCE: |
Capital Asset Management | ||||||||||||||||||||||||||||||
ORIGINAL DATE OF ISSUE: |
November 2007 | ||||||||||||||||||||||||||||||
DATE OF LAST REVISION: |
November 2007 | ||||||||||||||||||||||||||||||
CSOP NO: |
26.0 | ||||||||||||||||||||||||||||||
RATIONALE: |
To provide guidelines for the capitalization of signage.
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CSOP: |
Signage - BuildingsSignage that is part of a new building's construction or renovation and intended to be permanently attached is considered to be included as part of the total building project and capitalized if the total project cost is Seventy-Five Thousand ($75,000) or greater. Capital Asset Management considers signage to be permanently attached when removal of the signage would cause structural damage to the building, defacement to the property, damage to the sign and/or would require professional removal, such as the removal by a professional electrician. Examples of signage in new building construction or renovations that could be permanently attached include:
If the total project cost for new building construction or renovations is not $75,000, signage should be expensed. If signage is purchased independently of a building project and meets the above criteria for permanently attached the cost of the signage must be $75,000 or greater to be capitalized. If the cost of the signage alone is below $75,000 the signage should be expensed. Signage - Land ImprovementsSignage that is outside and not permanently attached to a building is considered a land improvement. Signage that is part of a land improvement project should be included in the total project cost and capitalized if the project cost is Seventy-Five Thousand ($75,000) or greater. Examples of signage that could be considered land improvements include the following permanently affixed signage:
Signage included in land improvement projects with a total project cost of less than $75,000 should be expensed. If signage is purchased independent of a land improvement project, the signage must be $75,000 or greater to be capitalized as a land improvement and should use the following object code:
If signage is purchased independent of a land improvement project and the cost of the signage is less than $75,000, the signage should be expensed. Signage - MoveableSignage that is not permanently attached to a building or permanently affixed outside of a building should be capitalized as moveable equipment if the sign has an acquisition value of at least $5,000 and a useful life expectancy of one year or greater. Capital Asset Management considers signage to be moveable when removal of the signage would not cause structural damage to the building, defacement to the property, damage to the sign and/or would not require professional removal, such as the removal by a professional electrician. Examples of signage that could be considered moveable include the following:
Signage - moveable with a unit cost of below $5,000 should be expensed. See CSOP 8.0 Capitalization of Moveable Equipment . |
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DEFINITIONS: |
Equipment- The term “equipment” includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.
Land improvement
- GASB 34 defines land improvements to consist of betterments, other than building, that ready land for its intended use.
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CROSS REFERENCES: |
CSOP 1.0 Capitalization Rules
CSOP 8.0 Capitalization of Moveable Equipment |
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RESPONSIBLE ORGANIZATION: |
Organizations that purchase capital assets. |