Constructed and Fabricated Assets
Constructed asset (construction in progress (CIP)) (capital projects) refers to all construction, renovation, improvement, fabrication, and customization projects or non-recurring extraordinary repairs and maintenance (such as flood damage repairs) where capital costs are greater than or equal to $50,000. Reference Constructed and Fabricated Asset Policy (ID: 024-0006)
Fabricated asset refers to equipment that is assembled or manufactured by Dartmouth using purchased materials, in-house machinery, tools, and labor. Fabricated equipment costing $25,000 or more and having a useful life of one year or more must be accounted for as construction in process (CIP) until completion. After completion the fabricated item is placed into service as moveable equipment. Fabricated equipment costing $5,000 to $24,999 and having a useful life of one year or more must be accounted for as fabrication and recorded as moveable equipment. Reference Property, Plant, and Equipment Management Policy (ID: 024-0001) for more information.
The policies, appendices, definitions, and forms will assist you with setting up a capital project, understanding capital and non-capital costs, choosing the correct natural class, budgeting and recording costs, and componentizing projects that are in use.
Project Criteria
Capital projects include:
- new construction
- renovations and additions to existing structures
- land and site improvements
- improvements that correct inadequacies, extend the life, or change the use of existing space or systems
- replacement of a building system
- fabricating equipment
- custom/customized software
- website development
Related Policies & Forms
Constructed and Fabricated Asset Policy (ID: 024-0006)
Appendix F Constructed Asset Guidance for Specific Costs
Appendix H Capital Projects Natural Class Definition
CIP Account Setup Form
Intent to Fabricate Request Form
Componentization Template
Policy Purpose
- Assist in determining the proper classification of costs for new construction, renovations,
improvements, maintenance projects, equipment and fabricated equipment. The policy
was developed to assist project managers and others with the important task of distinguishing
between capital and non-capital costs, the accounting treatment for these costs, and
the process to set up capital and fabricated projects. Costs that are capitalized
are depreciated over their useful lives. Costs that are not capitalized are recorded
as an expense in the year incurred.
- Determine the proper classification of costs of $50,000 or more for new construction,
renovation, improvement, and maintenance projects and fabricated equipment costing
$25,000 or more.
- Note: The capitalization threshold for tracking assets in the Fixed Asset Module is $5,000. For more information about the capitalization threshold, see Property, Plant, and Equipment Management Policy (ID: 024-0001), Appendix E Property, Plant and Equipment Thresholds
Construction in Progress (CIP) Setup Form
- This form is used to request CIP project funding and activity values. The form includes estimated start and end dates, scope, and budget. Requests and revised forms can be submitted to construction.in.progress@dartmouth.edu.
Intent to Fabricate Request Form
- This form must be completed for fabrication projects with an estimated cost of $5,000 or greater and a useful life of one year or more. Fabricated equipment costing $25,000 or more and having a useful life of one year or more must be accounted for as construction in progress (CIP) until completion. Submit this form to fixed.assets@dartmouth.edu.
Componentization Template
- This form is used to summarize all project costs as of the project end date. Financial Reporting will complete the Componentization Template for each project allocating total project costs to various components. Once Financial Reporting has componentized a project and all trailing costs have been recorded, the Project chart string will be disabled, and the CIP account closed. Once the CIP chart string is disabled, no additional transactions can be charged to the unique CIP chart string.
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