Capitalizing costs
MSU follows generally accepted accounting principles (GAAP), which allow for the capitalization of costs that are normal and necessary for the asset to be used for its intended purpose.
Costs that can be capitalized
Costs that can be capitalized include costs associated with receiving the capital asset and placing it into service. In addition to the cost of the asset itself—and any functionality-adding parts, in the case of an asset system—capitalized costs can include: freight charges, shipping and handling, customs fees, installation and setup fees, site preparation costs, and installation fees.
Costs that cannot be capitalized
Certain costs are not allowed to be capitalized and should not be considered part of the acquisition cost of a capital asset, even though they may seem necessary. This includes maintenance plans and warranties, software licenses, training costs, operating supplies and consumables, and project personnel salaries.