|SUBJECT:||Capitalization of Asbestos Abatement Cost|
|SOURCE:||Capital Asset Management, Office of the Treasurer|
|ORIGINAL DATE OF ISSUE:||December 2012|
Asbestos abatement costs can be capitalized if the costs exceed $75,000 and any one of the following criteria is met:
Example: A project is undertaken to renovate a building on campus. It is determined that asbestos is present and that it will need to be removed. The removal of the asbestos will improve the safety of the building and mitigates or prevents future contamination. The asbestos costs may or may not be capitalized depending on the total cost of the project.
Example in which asbestos costs should be capitalized:
Since the total costs of the overall project does meet the $75,000 threshold, all costs should be capitalized to an object code such as 7303-Building Improvements.
Situation in which asbestos costs should not be capitalized:
Since the total costs of the overall project do not meet the $75,000 threshold, all costs should be expensed to an object code such as 4700-Repairs and Maintenance.
|DEFINITIONS:||Asbestos Abatement - The safe removal of asbestos deemed to be dangerous to inhabitants of a building.|
|CROSS REFERENCE:||Emerging Issues Task Force (EITF) 90-8 and 89-13|
|RESPONSIBLE ORGANIZATION:||Capital Asset Management, Office of the Treasurer|