Standard Operating Procedures

SUBJECT: Capitalization of Signage
SOURCE: Capital Asset Management, Office of the Treasurer
ORIGINAL DATE OF ISSUE: November 28, 2007
CSOP NO: 26.0
RATIONALE: To provide guidelines for the capitalization of signage.
CSOP:
  1. Signage - Buildings
  2. Signage - Land Improvements
  3. Signage - Moveable Equipment
  1. Signage - Buildings
    Signage that is part of a new building's construction or renovation and intended to be permanently attached is considered to be included as part of the total building project and capitalized if the total project cost is Seventy-Five Thousand ($75,000) or greater.

    Capital Asset Management considers signage to be permanently attached when removal of the signage would cause structural damage to the building, defacement to the property, damage to the sign and/or would require professional removal, such as the removal by a professional electrician.

    Examples of signage in new building construction or renovations that could be permanently attached include:

    • Major building identification signs placed inside the building structure at each major entrance which list departments, offices and floors.
    • Wall-mounted directional signage which reinforces circulation within the building.
    • Room number, name and occupancy signage.
    • Exit and restroom signage.
    • Dedication signage.
    • Scoreboards, restaurant and menu signage that are permanently attached to the building structure.

    Signage included in new building construction or renovations in which the total project cost is $75,000 should be capitalized to the following object codes:

    Following is a listing of moveable equipment object codes:
    Object Code Description
    7300 Building & Attached Fixtures
    7301 Building - Professional Fees
    7303 Building - Improvements

    If the total project cost for new building construction or renovations is not $75,000 signage should be expensed.

    If signage is purchased independently of a building project and meets the above criteria for permanently attached the cost of the signage must be $75,000 or greater to be capitalized. If the cost of the signage alone is below $75,000 the signage should be expensed.

  2. Signage - Land Improvements
    Signage that is outside and not permanently attached to a building is considered a land improvement. Signage that is part of a land improvement project should be included in the total project cost and capitalized if the project cost is Seventy-Five Thousand ($75,000) or greater.

    Examples of signage that could be considered land improvements include the following permanently affixed signage:
    • Identification signage which introduces and welcomes visitors to your campus or campus facility.
    • Directional signage which offer motorists and pedestrians the direction and information they need to make their way around your campus facility and grounds. Directional signs are placed to offer quick help at intersections, through parking areas, and multiple building complexes.
    • Signage located outdoors and not permanently attached to a building which identifies a building or locations on your campus.
    • Parking lot signs which identify entrances and exits to parking lot facilities.
    • Parking garage identification signage that is not permanently attached to the parking garage structure.
    • Scoreboard Signage that is not permanently attached to a building structure and/or surrounded by an outside arena which includes football field scoreboard, a soccer field scoreboard, a swimming pool scoreboard or a tennis court scoreboard.

    Signage included in land improvement projects with a total project cost of $75,000 or greater should use the object code of the project not of the sign itself which include:
    Object Code Description
    7465 Land Improvements - Yard, Fencing & Barriers
    7466 Land Improvements - Landscapings
    7468 Land Improvements - Professional Fees
    7477 Land Improvements - Gifts

    Signage included in land improvement projects with a total project cost of less than $75,000 should be expensed.

    If signage is purchased independent of a land improvement project the signage must be $75,000 or greater to be capitalized as a land improvement and should use the following object code:
    Object Code Description
    7465 Land Improvements - Yard, Fencing & Barriers

    If signage is purchased independent of a land improvement project and the cost of the signage is less than $75,000 the signage should be expensed.

  3. Signage - Moveable
    Signage that is not permanently attached to a building or permanently affixed outside of a building should be capitalized as moveable equipment if the sign has an acquisition value of at least $5,000 and a useful life expectancy of one year or greater.

    Capital Asset Management considers signage to be moveable when removal of the signage would not cause structural damage to the building, defacement to the property, damage to the sign and/or would not require professional removal, such as the removal by a professional electrician.

    Examples of signage that could be considered moveable include the following:
    • Free Standing Signage not permanently affixed
    • Marquee and/or Event Signage
    • Roadside changeable letter signage
    • Wall Signage not permanently attached to a building structure
    • Scoreboards
    • Restaurant and menu boards

    Signage - Moveable should be capitalized to the following object codes:
    Object Code Description
    7000 Capital Equipment
    7030 Capital Equipment - Federally Funded
    7031 Capital Equipment - Federally Owned
    7032 Capital Equipment - Non-IU or Fed Owned

    Signage - moveable with a unit cost of below $5,000 should be expensed.

    See CSOP 8.0 Capitalization of Moveable Equipment
DEFINITIONS: Equipment - The term "equipment" includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.

Land improvement - GASB 34 defines land improvements to consist of betterments, other than building, that ready land for its intended use.

Permanently attached - When removal would cause structural damage, defacement to property, damage to the sign and would require professional removal, such as removal by a professional electrician.
CROSS REFERENCE: CSOP 8.0 Capitalization of Moveable Equipment
CSOP 19.0 Capitalization of Building Projects (not published under development)
CSOP 21.0 Capitalization of Land Improvement Projects (not published under development)
RESPONSIBLE ORGANIZATION: Organizations that purchase capital assets