Capitalisation principles

Definitions and profiles


Assets are defined as service potential or future economic benefits controlled by an entity as a result of past transactions or other past events. Assets can be categorised as current (able to be realised within twelve months) or non-current (unlikely to be realised within twelve months) and encompass items such as cash, receivables, investments, property plant and equipment.


Property is broadly defined by the University as Land, Buildings, Dwellings and Site Infrastructure. These categories form part of the University’s non-current assets.

Property is broadly defined by the University as:

  • land;
  • buildings;
  • site works and services including;
    • roads
    • bridges
    • footpaths
    • carparks
    • electricity
    • drainage
    • sewerage
    • telecommunications
    • computer networks
    • capital improvements, to previously capitalised assets such as air conditioning or fire control systems

Property is acquired or constructed at a cost of which constitutes capital expenditure according to a prescribed expenditure limit and capitalisation policy approved by the Finance Committee. Property is managed within the University’s General Ledger, however registers detailing individual records within each category are maintained outside of the ES Financials System.

The definition of property expressly excludes repairs and maintenance.

Plant and equipment

Plant and equipment is broadly defined by the University as Office Equipment, Research Equipment, Teaching Equipment, Computer Equipment, Motor Vehicles, Musical Instruments, Works of Art and the Rare Library Collection. These categories form part of the University’s non-current assets.

Plant and Equipment that has a useful life of more than one year, and a cost of which constitutes capital expenditure according to a prescribed expenditure limit and capitalisation policy approved by the Finance Committee. Plant and Equipment is managed within the ES Financials – Asset Management System. They are defined as follows (the ES Financials profile name is listed in brackets). When adding an asset within the ES Financials environment it is essential to include the profile name. The profiles are recorded within the University’s general ledger and the Assets Management System.

Office equipment (OFFICE_EQ)

This category includes, photocopiers, Light Pro projectors, cash registers, telephone (communication) systems, facsimile machines etc.

Research equipment (RSRCH_EQ)

This category includes microscopes, pumps, compressors, cameras, coolrooms, counters, image enhancers, meters, photometers, generators, magnifiers, power supplies, amplifiers, oscilloscopes, spectrometers, digitisers, lasers, centrifuges, condensers, etc.

Teaching equipment (TEACH_EQ)

This category includes video equipment, audio equipment, projectors, monitors, camera equipment, oscilloscopes, microscopes, survey equipment, refrigerator and freezing equipment, etc.

Computing equipment (COMPUTER)

This category includes processing units, servers, routers, controllers, gates, bridges, miniclusters, cabling, etc.

Motor vehicles (VEHICLES)

This category includes motor cars, trucks, vans, tractors, front-end loaders, trailers, etc.

Furniture and other equipment (OTHER_EQ)

This category includes items not falling within other categories, other than works of art and rare library materials. The classification is wide and examples are furniture, furnishings, kitchen plant, recreation equipment, sporting equipment, fire prevention equipment, farming and gardening equipment (not being motor vehicles), etc.

Musical instruments (MUSIC_INST)

Musical instruments may be acquired by purchase or gift. This category includes all musical instruments such as strings, woodwind, brass, percussion and electronic instruments.

Works of art (ARTWORKS)

Works of art may be acquired by purchase or gift. This category includes paintings, sculptures, prints, ceramic articles, etchings, wall hangings, etc. All works of art are recorded in the Assets Management System. Irrespective of purchase price.

Portable and attractive items (NONCAPITAL)

An individual asset category for attractive and portable items has been created for each of the eight categories listed above. To record these items, it is necessary to use the NONCAPITAL profile for all portable and attractive items, regardless of asset type. Portable and Attractive items are considered to be equipment costing less than $10,000 which through attractiveness for private use is considered by Business Officers to be liable to misappropriation. Such items should be recorded within the NON-CAPITAL section of the Asset Management System. This provides a data base management system for such items. Values are not required to be recorded.

Thresholds for the recording of assets


The following expenditures are considered to be of a capital nature and must be recorded in the University's books of account:

  • All new land;
  • All new buildings together with associated site works and services;
  • Services associated with access to the University site (e.g. roads and footpaths), other than routine repairs and maintenance;
  • Services associated with the provision of electricity, drainage and stormwater control, sewerage and fire prevention, other than routine repairs;
  • Services associated with electronic voice and/or data transmissions and computer networks;
  • Rehabilitation and renovation of assets previously capitalised when the expenditure prolongs the useful life of the asset or enhances the benefit from the asset, provided that expenditure is not of a routine or recurring nature;
  • When assets are partially replaced under a rehabilitation or renovation program, the value of the asset previously capitalised shall be reduced by an amount equivalent to the estimated original cost of the replaced part less depreciation provided if any;
  • Capital improvements to previously capitalised assets such as air conditioning or fire control.

Notwithstanding the points above, individual expenditures which cost $20,000 or less, or individual costs which constitute a total project cost of $20,000 or less, shall not be recorded as assets of the University, unless a separate determination has been made in conjunction with discussion with the Asset accountant. All projects involving repairs and maintenance and refurbishment must be considered in respect of the correct capitalisation approach and it is incumbent upon the Manager, Facilities and Services, to undertake this consideration and to engage the Asset accountant, if required.

All expenditures undertaken by Manager, Facilities and Services, having a total project cost greater than $20,000 shall be referred to the Asset accountant, for assessment concerning the recording of assets in the University's books of account, and whether or not the particular project is capital or expense in nature.

It is a requirement that all major alterations to buildings or the rehabilitation or renovation of buildings be referred to Facilities and Services, in the first instance. When Facilities and Services does not undertake the work on behalf of schools, sections or ANU business units, Facilities and Services shall advise the Asset accountant or nominee of the Manager, Financial Services, who shall assess the proposed work and may direct the recording of the asset in the University's books of account.

Costs incurred relating to a non-current assets subsequent to it having been first put into use or held ready for use must be added to the carrying amount of the asset when and only when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the asset, will flow to the entity in future reporting periods. All other such costs must be recognised as an expense in the reporting period in which they are incurred.

The foregoing guidelines shall be applied to all works undertaken by Facilities and Services and schools/sections. The source of funding is not a criterion for the recording of assets in the University's books of account.

ANU is subject to the following Commonwealth Department of Finance Guideline.
Where commitments are not recognised as liabilities in the Statement of Assets and Liabilities, the ANU Financial Statements shall disclose the committments for capital expenditure classified according to whether they are payable:

  • not later than one year;
  • later than one year and not later than two years;
  • later than two years and not later than five years; and
  • later than five years,
  • after the end of the accounting period.

Plant and equipment


The monetary threshold for the recording of assets in the University's Assets Management System, as approved by Finance Committee on 17 July 1998 are:

  1. plant and equipment items costing $10,000 or more (other than arts and antiquities);
  2. equipment costing less than $10,000 which through attractiveness for private use is considered by Business Officers to be liable to misappropriation may be recorded on the Assets but without a value being recorded; and
  3. expenditure on improvements of existing assets should be recognised as an increase in the value of assets where:
    1. the expenditure results in a material increase in the service capacity or quality of the service provided by the asset; or
    2. there has been a material extension to the asset's useful life as a result of the expenditure;
  4. there is no monetary threshold applicable to the capitalisation and recording of works of art and antiquities in the Assets Management System.

Adjustment of monetary thresholds

A formal review of the monetary thresholds is undertaken by the Director, Finance and Business Services for recommendation to Finance Committee.

An item with an accumulated historical cost less than the approved monetary threshold (‘attractive’ items and works of art excepted) is ineligible for recording on the Assets Management System. Subsequent to each adjustment of thresholds, those items which have a recorded value less than the revised threshold may be automatically removed from ANU records, depending on their determined value in use.