1004.2 Depreciation of Land Improvements, Buildings, Equipment, and Books
Subject Area: Accounting
Responsible Office: Financial Services
Sponsor: Associate Vice President for Finance
Originally Issued: July 1988
Revised: June 30, 2006, January 2010, June 2012
Refer Questions To: Craig Elmore; celmore@uchicago.edu
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:
Land
| Description | Years Useful |
|---|---|
| Land Improvements – general | 20 |
| Land Improvements – handicap accessibility | 20 |
Infrastructure
| Description | Years Useful |
|---|---|
| Utility Systems – steam lines, chillers | 20 |
| Utility Systems – electric vaults, electric loops | 20 |
| Telecommunications Systems | 5 |
Componentized Building and Renovation
| Description | Years Useful |
|---|---|
| Excavation and Backfill | 60 |
| Exterior Walls and Foundations | 60 |
| Framing | 60 |
| Floors | 60 |
| Roofs | 40 |
| Partitions and Interior Finishes | 25 |
| Electric System | 20 |
| Plumbing System | 25 |
| Heating and Air-Conditioning System | 20 |
| Sprinkler System | 25 |
| Elevators, Escalators, and Other Fixed Equipment | 25 |
| Windows, Window Replacements | 25 |
| Construction Exterior | 30 |
| Alarm & P.A. Systems | 20 |
| Non-Componentized Renovation Projects | 25 |
| Non-Componentized Buildings | 45 |
| Capitalized Interest | 30 |
Equipment
| Description | Years Useful |
|---|---|
| Scientific and Technical | 10 |
| Constructed Scientific and Technical | 10 |
| Computer and Software | 5 |
| Telecommunications | 5 |
| Office and Educational | 5 |
| Furniture and Fixtures | 10 |
| Shop Machinery and Tools | 10 |
| Vehicles | 3 |
| Miscellaneous Equipment | 7 |
| Library Books | 10 |
3. 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.
4. 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.
5. Depreciation of newly constructed buildings over $25 million will commence in the month the building is placed into service and/or occupied.
6. 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.