Property Accounting Capital component guide
When a project is under review for capitalization its costs must be reconciled between the costs from the purchase review process & those costs established within the fiscal year ledger. After the costs are reconciled then the total costs must be componentized and the very best way to establish a basis for componentization is to get a hold of the projects AIA (American Institute of Architects) document. This document will breakdown the costs according to the specific tasks of the project and many times there is a budget amount with each line expenditure total.
Now I will assign a SAR (standard asset record) code to each line item and below is a matrix of the general cost category and the SAR I assign to each line. Now as a guide for Service System category items, it should be a cost category that carries communication data, liquid, gas, steam or electric.
|AIA Descriptive cost category:||Fixed assets SAR code:||Book life:|
|Change orders (unspecified in description)||Allocate||Allocated|
|Painting & Wall covering||0028||40|
|Permits & fees & bonding||Allocate||Allocated|
|VWC (vinyl wall covering)||0028||40|
|Overhead & Profit||Allocate||Allocate|
Note: when the SAR code is tagged as 'Allocate' this means is that these costs will be allocated to actual SAR code categories as supporting costs.