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SPA Process User’s Guide – Chapter 1 – Introduction to Capital Assets

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Furniture and Equipment

Furniture and Equipment Definition

Furniture and equipment placed into service for operations with benefits extending beyond one year from date of acquisition. Improvements or additions made (to existing furniture or equipment) is capitalized if they meet the capitalization threshold.

Jointly Funded Furniture and Equipment

Furniture and equipment paid for jointly by the state and other governmental entities should be capitalized by the entity responsible for future maintenance if ownership cannot be determined.

Modular Furniture

Agencies should capitalize modular furniture for which individual items cost $5,000 or more and report these items to the SPA System.

Personal Computers

Include the following elements when calculating the total unit cost of a personal computer:

Items which will not be considered for inclusion when calculating the total cost include external drives, scanners, external modems, printers and plotters.

The method of purchase is not a factor in determining the initial cost of a personal computer.

Depreciation Methodology

The straight-line depreciation method (historical cost minus residual value, divided by useful life) is used for furniture and equipment.

Capitalization Threshold

The capitalization threshold for furniture and equipment is $5,000.

Examples of Expenditures to Capitalize as Furniture and Equipment

Note: If incidental items, such as extended warranties or maintenance agreements, are included with the capital asset upon receipt and are not listed as a line item on the purchase order or on the invoice, then the incidental charges are considered a part of the capital asset.