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  Policy No. 1004.2
Depreciation of Land Improvements, Buildings, Equipment, and Books

Subject Area: Accounting
Responsible Office: Financial Services
Approval: Associate Vice President for Finance
Originally Issued: July 1988
Revised: June 30, 2006, January 2010, June 2012
Refer Questions To: Michael Szczepanek, 773-702-5130

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:

Years Useful

Description

Land:

 
20 Land improvements - general
20 Land improvements - handicap accessibility
Infrastructure:  
20 Utility systems - steam lines, chillers
20 Utility systems - electric vaults, electric loops
5 Telecommunications Systems

Componentized Building and Renovation:

 

60

Excavation and backfill

60

Exterior walls and foundations

60

Framing

60

Floors

40

Roofs

25

Roofing

25

Partitions and interior finishes

20

Electric system

25

Plumbing system

20

Heating and air-conditioning system

25

Sprinkler system

25

Elevators, escalators, and other fixed equipment

25

Windows, window replacements

30

Construction Exterior

20

Alarm & P.A. Systems

25

Non-componentized renovation projects 

45

Non-componentized buildings 

30

Capitalized interest 

Equipment:

 

10

Scientific and technical

10

Constructed scientific and technical

5

Computer and software

5

Telecommunications

5

Office and educational

10

Furniture and fixtures

10

Shop machinery and tools

3

Vehicles

7

Miscellaneous equipment

10

Library books


  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 under $25 million, building renovations, land improvements, leasehold improvements, and books in the year they are capitalized.
  3. Depreciation of newly constructed buildings over $25 million will commence in the month the building is placed into service and/or occupied.
  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.