Capitalization Policy

Temple University’s capitalization policy for movable and fixed equipment, land and land improvements, buildings and building renovations is defined as follows:

Capitalization Policy

For Financial Statement, F&A Rate Proposal, Federal form 990 Informational Return and University Funding Obligation calculations, the capitalization requirements are as follows:

  1. All movable and fixed equipment having a useful life in excess of 1 year and a cost in excess of $5,000 per single working unit.  A working unit is defined as a piece(s) of equipment that when assembled, function as a stand-alone unit. 
  2. All land and land improvements, buildings and building renovations having a useful life in excess of 1 year and a cost in excess of $50,000 per CER project.   A CER project is defined as improving and/or extending the useful life of the building and which has been specifically approved by the Facilities Committee  “FC”.

Group Purchases

Occasionally the University will capitalize a group purchase of similar items, which individually are less than the capitalization amount. Generally these are in the form of work stations with component pieces costing less than $5,000 per unit that, when assembled, functions as a stand-alone working unit. The working units are capitalized as individual units and accounted for as such in the property records.


Temple University depreciates all buildings and equipment by the straight-line method over their useful lives. Useful life is based on the American Hospital Association's estimated useful lives of depreciable hospital assets table, as adjusted, according to Temple University's experience.

Retirement Policy

Assets are retired from the capital asset file when it has been determined that the asset is no longer operable, has been replaced, or is no longer available for use. Notification of retirement is made through annual equipment surveys verified by the using departments and submitted to Cost and Property, Purchasing Surplus Equipment Forms submitted to the Purchasing department and loss or stolen report notifications submitted to the Department of Risk Management.

In addition, for existing assets that have been modified or replaced by a building renovation project, the original cost and accumulated depreciation of the item being replaced is removed from the file. When the actual cost of the asset is not readily determined, an estimated cost is calculated by taking the replacement cost and discounting it back to the original date of the asset.


The Cost and Property department is responsible for the calculation, maintenance and storage of this information.