PURPOSE: A provision for depreciation is recorded in the Financial Accounting System to reflect the net asset value of land improvements, buildings, equipment, and books throughout the useful life.

POLICY:

1. Depreciation on capitalized assets will be calculated in accordance with applicable financial accounting pronouncements.
2. Land improvements, buildings, equipment, and books will be depreciated using the straight line method over the following useful lives:

1. If equipment is acquired in the first half of the fiscal year, a full year's depreciation is recorded in the first year. If the asset is acquired in the second half of the fiscal year, no depreciation is recorded in that fiscal year.
2. A full year's depreciation will be recorded for buildings, building renovations, land improvements, leasehold improvements, and books in the year they are capitalized.
3. Depreciation of newly constructed buildings will commence in the year of useful occupancy.
4. Leasehold Improvements (see Financial Policy No. 1009.2) will be depreciated using the straight line method over the remaining life of the lease or the useful life of the improvement whichever is shorter.