8602 CAPITALIZED PROPERTY
(Revised 3/96)
State property is capitalized for accounting purposes when certain conditions are met. Capitalization means to record the property in the accounting records as assets. Tangible property must meet the following three requirements in order to meet the capitalization requirements:
- Have a normal useful life of at least one year;
- Have a unit acquisition cost of at least $5000 (e.g., four identical assets which cost $3000 each, for a $12,000 total, would not meet the requirement); and
- Be used to conduct State business.
When the above three requirements are not met, the property will not be recorded as an asset in the General Ledger. See SAM Section 8615 and 8615.1 for accounting instructions for intangibles.
Departments which purchase property with proprietary funds may use different requirements for property capitalization. Contact Department of Finance, Fiscal Systems and Consulting Unit for approval of proposed criteria.
When the term "equipment" is used in SAM, it refers to personal property which is capitalized.
