Capitalization Policy

Effective Date:

December 1, 2017


Equipment Capitalization Policy

Policy Review Date:

To be reviewed every 3 years from the effective date

Issuing Authority:

Research Foundation President

Responsible Party:

RF Chief Financial Officer

Contact Information:


Reason for Policy

The Research Foundation for The State University of New York ("RF") has created this Capitalization Policy to outline and define the criteria for capitalizing various assets owned by the RF.

Statement of Policy

The RF shall capitalize assets if they satisfy the following:

Types of Capitalized Assets

The following RF assets are considered capital assets:

Assigning Asset Value

The preferred method of determining Fair Market Value is to obtain an independent written appraisal. If a written appraisal is not obtained one of the following methodologies may be used to determine Fair Market Value:

  1. Real Property

    Capitalization costs include but are not limited to:

  2. Buildings

    Capitalization costs include, but are not limited to, the following:

  3. Building/Leasehold Improvements

    Building/Leasehold improvements are significant alterations, renovations, or structural changes that meet or exceed $100,000 and increase the usefulness of the asset, enhance its efficiency, or prolong its useful life by at least one year. Operating locations should coordinate reporting with their campus facilities department and SUNY System Administration to ensure that expenditures are reported properly and capitalized if appropriate.

  4. Equipment

    Capitalization of equipment costs include, but are not limited to, the following (in conformance with the OMB guidelines):

    Leased equipment shall be capitalized if the lease agreement meets any of the following criteria under ASC 840-10-25:

  5. Intangible Assets

    Intangible assets are those that lack physical substance and are non-financial in nature. They must be identifiable, meaning they are either capable of being separated by means of sale, transfer, license or rent, or they arise from contractual or legal rights.

    1. Software Development

      For software developed or obtained for internal use, the RF will conform to the guidance in ASC 350-40 that states that internal and external costs incurred to develop internal-use computer software during the application development stage shall be capitalized. The internal-use software must have both of the following characteristics to be capitalized:

      The software is acquired, internally developed, or modified solely to meet the entity’s internal needs; and

      During the software’s development or modification, no substantive plan exists or is being developed to market the software externally.

      For the cost of specified upgrades and enhancements for internal-use computer software to be capitalized it must be probable that those expenditures will result in additional functionality.

    2. Intangible Assets - Other

    Examples include, but are not limited to, land use rights or easements, patents, copyrights, trademarks, permits and licenses.

Inventory Requirements

The RF requires that equipment must be entered into the Real Asset Management (RAM) property system within 90 days of payment date. If additional time is needed, campus staff must contact RF Central Office Finance staff.


The following table outlines the responsibilities for compliance with this Policy:

Responsible Party


Operations Managers or designee

Responsible for oversight and management of implementation of this policy at campus locations

Campus and Central Office staff members who initiate, process, review, approve or record financial transactions on behalf of the RF

Responsible for administering this policy.

RF Chief Financial Officer

Responsible for maintaining, evaluating and periodically updating this policy as needed.


Acquisition Cost: the net invoice price of the asset, plus the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired.

Fair Market Value: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (Source: FASB Master Glossary)

Real Property: land and anything growing on, attached to, or erected on it, that cannot be removed without injury to the land. (Source: Black's Law Dictionary, (Eighth Ed. 2004))

Research Supported Economic Development: activity through sponsors designated by OM or designee where the purpose is to support the development or growth of new or existing businesses and to enable the creation or support of jobs. Examples include awards sponsored by the NYS Department of Economic Development.

Research Infrastructure: facilities, resources, and related services that are used to conduct top-level research, including major building purchases or renovations and scientific equipment or sets of instruments.

Unobligated Title: Title to an asset which is clear of conditions. Examples of conditions include but are not limited to OMB restrictions on the use and sale of federally-funded equipment, including requirements to refund the government if the item is sold.

Related Information

Award Purpose Capitalization Matrix






October 27, 2021

Policy reviewed

December 1, 2017

Updated types of capitalized assets to include software and changed the requirement of when assets are required to be added to RAMI from 60 days of the asset being placed into service to 90 days from the payment date.

September 1, 2014

Updated to include criteria for research supported economic development and research infrastructure.