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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Impact of Threshold on Indirect Cost Plans

The state of Texas establishes capitalization thresholds based upon statewide materiality considerations. These thresholds may differ from capitalization requirements of various federal programs. The determination of whether to maintain separate asset records for cost recovery purposes must be reconciled with the cost that may ultimately be recovered and the potential impact of federal compliance requirements.

Changes in capitalization thresholds are generally applied prospectively. Assets recorded under the previous thresholds are left as capitalized and depreciated/amortized for the remainder of their useful life.

A history of capitalization threshold changes: