The value of a capital project is added to a facility’s book value and amortized over the remaining useful life of the facility. Includes all projects with a value greater than $50,000 and occasionally some projects with a value less than $50,000; increases physical output or service capacity; or reduces operating costs or energy consumption; or extends the life of the facility.
Operating Expenditure
The value of an operating project is recorded as an expenditure in the year the work is performed. Includes all projects with a value less than $50,000 and occasionally some projects with a value of more than $50,000; keeps the condition of an asset at its expected operating standing (e.g. duct cleaning). Also includes repairs after damage or accidents or prolonged use, and replacement of component parts with the same type and performance capability.
