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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Capital Asset Accounting
Capital Asset Acquisition Cost

Report and record capital assets at their historical costs. Historical costs include:

  • Vendor’s invoice (plus the value of any trade-in or educational allowance, if reflected on the invoice)
  • Sales tax
  • Initial installation cost (excluding in-house labor)
  • Modifications
  • Attachments
  • Accessories or apparatus necessary to make the asset usable and render it into service
  • Ancillary charges (such as freight and transportation charges, site preparation costs and professional fees)

Incidental charges (such as extended warranties, maintenance agreements, additional parts or consumable items) are no longer considered part of the asset cost.


Asset Cost
Capital Asset $ 10,000
Trade-in 2,000
Installation Cost 250
Freight/Transportation 300
Total Cost of Asset $ 12,550

Note: For more information regarding incidental charges, see the Note and the If/Then table under Capital Asset Acquisition Cost in Chapter 1 of the SPA Process User’s Guide.

As required by GASB 89, on financial statements prepared using the economic resources measurement focus, agencies must recognize an interest cost incurred before the end of a construction period as an expense in the period in which the cost incurred. As a result, an interest cost incurred before the end of a construction period is not included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. For additional information, see Note 2 – Capital Assets.

Glenn Hegar
Texas Comptroller of Public Accounts
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