Kansas Department of Administration

02-a-017 - Capitalization of Buildings and Building Improvements (May 13, 2002) (Supplements 02-a-012, 01-a-021, 01-a-018 )

Posted on October 21, 2021 at 12:49 PM by Kansas Department of Administration

INFORMATIONAL CIRCULAR NO. 02-A-017 (Supplements 02-a-012, 01-a-021, 01-a-018 )
DATE: May 13, 2002
SUBJECT: Capitalization of Buildings and Building Improvements
EFFECTIVE DATE: July 1, 2002
A & R CONTACT: Gail Barnhart (785) 296-7217 (gail.barnhart@da.state.ks.us)
Gary Bond (785) 296-2287 (gary.bond@da.state.ks.us)
APPROVAL: Approved by Dale Brunton
SUMMARY: Revising and establishing expenditure subobject codes for land, buildings, and improvements


Agencies often undertake building renovation, addition or improvement projects that either enhance the asset's functionality (effectiveness or efficiency), or extend the asset's expected useful life. These projects include costs for architectural and engineering design, project management, duplicating, blueprinting, materials and other ancillary services. Currently these types of expenditures are coded under the appropriate service or commodity expenditure subobject codes. Coding these transactions in this manner allows STARS to capture services for 1099-reporting purposes as required by the Internal Revenue Service. Under the current coding guidelines, agencies that have buildings and other structures must maintain a separate tracking system to associate these "project" expenditures with the appropriate building in order to capitalize these expenditures in accordance with previously issued policies regarding capital assets. These expenditures must then be manually added to the cost of the asset within the agency's fixed asset system using Form DA-83, (Corrections and Additions to Inventory Records).

To eliminate the need for agencies to maintain a separate "system" to track these expenditures, the Division of Accounts and Reports is revising subobject codes in the 2XXX series and establishing new subobject codes in the 4XXX series effective July 1, 2002. The new subobject codes will be used to process the expenditure in STARS. However, agencies should record these costs for asset reporting as subobject code 4200 (buildings and improvements) and 4400 (land nonstructural improvements) as appropriate.

The following subobject codes are being revised to reflect the non-capital designation:

2230 Duplicating, Blue-Printing and Reproducing - non-capital
2290 Other Vendor Printing and Binding - non-capital
2440 Buildings and Grounds Repair and Service - non-capital (IRS Reportable)
2710 Architects and Engineers - non-capital (IRS Reportable)
2790 Other Professional Fees - non-capital (IRS Reportable)
3410 Materials and Supplies for Buildings - non-capital

The following subobject codes are being added for services relating to land and buildings:

4230 Duplicating, Blue-Printing and Reproducing - Buildings & Improvements - capital/inventory
4239 Duplicating, Blue-Printing and Reproducing - Buildings & Improvements - capital/non-inventory
4430 Duplicating, Blue-Printing and Reproducing - Land - capital/inventory
4439 Duplicating, Blue-Printing and Reproducing - Land - capital/non-inventory
4240 Other Vendor Printing and Binding - Buildings & Improvements - capital/inventory
4249 Other Vendor Printing and Binding - Buildings & Improvements - capital/non-inventory
4440 Other Vendor Printing and Binding - Land - capital/inventory
4449 Other Vendor Printing and Binding - Land - capital/non-inventory
4250 Buildings and Grounds Repair and Service - Buildings & Improvements - capital/inventory (IRS Reportable)
4259 Buildings and Grounds Repair and Service - Buildings & Improvements - capital/non-inventory (IRS Reportable)
4450 Buildings and Grounds Repair and Service - Land - capital/inventory (IRS Reportable
4459 Buildings and Grounds Repair and Service - Land - capital/non-inventory (IRS Reportable)
4270 Architects and Engineers - Buildings & Improvements - capital/inventory (IRS Reportable)
4279 Architects and Engineers - Buildings & Improvements - capital/non-inventory (IRS Reportable)
4470 Architects and Engineers - Land - capital/inventory (IRS Reportable)
4479 Architects and Engineers - Land - capital/non-inventory (IRS Reportable)
4280 Other Professional Fees - Buildings & Improvements - capital/inventory (IRS Reportable)
4289 Other Professional Fees - Buildings & Improvements - capital/non-inventory (IRS Reportable)
4480 Other Professional Fees - Land - capital/inventory (IRS Reportable)
4489 Other Professional Fees - Land - capital/non-inventory (IRS Reportable)
4290 Materials and Supplies for Buildings - capital/inventory
4299 Materials and Supplies for Buildings - capital/non-inventory

A summary of these subobject codes may be found on the Attachment A of this circular.

The new subobject codes will follow the same pattern used for other capital assets. Building and improvement projects less than $5,000 will continue to use the 22XX, 24XX, 27XX, or 34XX subobject code. These are classified as "non-capital" expenditures.

Subobject codes 42X9 or 44X9 will be for land, buildings or improvements more than $4,999.99 but less than $100,000. These are capital, but non-inventory, and will not appear on the agency's monthly Capital Asset Expenditure Report (DAFR 8460). They will still be reportable on Form DA-84 (Land Inventory) or DA-86 (Buildings and Improvement Inventory) pursuant to K.S.A. 75-3516.

Subobject codes 42X0 or 44X0 will be used for land, building or improvements projects greater than or equal to $100,000. They are capital and inventory items and will appear on the agency's Capital Asset Expenditure Report (DAFR 8460).

All payment vouchers submitted to the Division of Accounts and Reports must clearly indicate if the payment is a maintenance repair or a capital improvement. Please state on the face of the voucher "Total improvement greater than or equal to $100,000", "Total improvement amount greater than or equal to $5,000 and less than $100,000", or "Total improvement amount less than $5,000" as appropriate.

Please note that pursuant to K.S.A. 75-3516, the Director of Accounts and Reports shall maintain a master list of real property owned by the State agencies regardless of the cost or value. The records must include the acreage, location by city and county, a brief legal description and the use and purpose of each lot, tract or parcel of land held by a state agency. Buildings or improvements of $5,000 or more will be required to be included on the master list of real property. It will be up to the agency's discretion to determine if improvements less than $5,000 are added to the master list of real property. Accounts and Reports will continue to provide the agencies with a printout of their real property each year and the agencies will make the additions or deletions using Form DA-84 and DA-86.

Policy and Procedure Manual Filing No. 7,002 and 11,749 will be updated to reflect the subobject code changes and additions.

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Attachment: Expenditure Subobject Coding for Capitalization of Land and Buildings (.pdf)  

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