#  Financial Management of Property, Plant and Equipment (Capital Assets and Equipment) 

 



**Responsible Office:** Financial Accounting and Reporting  
**Date First Effective:** 2/15/2007  
**Revision Date:** 07/01/2025  
**Word Doc:** [Property Plant & Equipment Policy - Full Policy](/sites/g/files/omnuum12696/files/2025-10/financial_management_of_property_plant_and_equipment_appendices.docx "final_financial_management_of_property_plant_and_equipment_appendices.dotx")  
**School Specific Policies:** [FAS Research Equipment Management](https://research.fas.harvard.edu/equipment-management)

This policy establishes the proper methods to account for facilities and equipment, including capitalization, depreciation, disposals and impairments, and various funding sources. Download the [full policy](https://policies.fad.harvard.edu/sites/hwpi.harvard.edu/files/fad_policies/files/final_financial_management_of_property_plant_and_equipment_appendices.dotx?m=1718721328) .

## Policy Statement

The University requires that amounts expended for facilities and equipment (in excess of certain thresholds and whether purchased, constructed or leased) be capitalized, and depreciated. Capitalized amounts should be periodically inventoried for impairment or possible write-off in accordance with Generally Accepted Accounting Principles (GAAP) and regulatory requirements.

This policy provides guidance for the management and control of capital equipment that is owned by the University, titled to the University, under the custody of the University, or for which the University is accountable to the federal government or other sponsors.

If direction differs between this policy and external regulations, sponsor or donor terms, or other internal policy or procedures, the more restrictive instruction will apply.

## Reason for Policy

This policy exists to ensure adherence with Generally Accepted Accounting Principles (GAAP) and other regulatory requirements, to promote consistent accounting treatment across the University, and to ensure the operating results of University units are not misstated as a result of transactions unrecorded or recorded improperly.

## Who Must Comply

All Harvard University schools or units, local and central units, affiliated institutions, allied institutions and University-wide Initiatives (collectively, “schools and units”) must comply.

If a University Policy conflicts with any other University Policy, term, external regulation, or law, the more restrictive provision will apply.

Harvard University schools, tubs and local units may have related Local Policies as long as they are consistent with and meet the minimum standards set by University Policies.

## Summary of Procedures

1\. Oracle Fixed Assets is the System of Record for Property, Plant, and Equipment.  
2\. Follow Harvard’s General Rules for Capitalization  
3\. Follow Specific Rules for Capitalizing Equipment  
4\. Follow Specific Rules for Capitalizing Buildings, Land and Improvements  
5\. Inventory and Asset Management  
6\. Correcting General Ledger Coding  
7\. Account for Disposition, Retirement, and Impairments  
8\. Comply with Sponsored Requirements

## Appendices 

- [**Appendix A:**](/node/1628983)[ Summary of Policy for Capital Equipment for Areas with Sponsored Research](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_a.docx "ppe_policy_appendix_a.dotx")
- [**Appendix B:**](/node/1628984)[ Detailed Guidance on Capitalizing vs. Expensing Expenditures](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_b.docx "ppe_policy_appendix_b.dotx")
- [**Appendix C:**](/node/1628985)[ Detailed Guidance on Depreciating Facilities and Equipment](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_c.docx "ppe_policy_appendix_c.dotx")
- [**Appendix D:**](/node/1628986)[ Detailed Guidance on Disposals and Impairments](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_d.docx "ppe_policy_appendix_d.dotx")
- [**Appendix E:**](/node/1628987)[ Detailed Guidance on Facilities and Equipment Funding](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_e.docx "ppe_policy_appendix_e.dotx")
- [**Appendix F:** Fabrications Flowchart](/sites/g/files/omnuum12696/files/2025-12/PPE%20Policy%20Appendix%20F.docx "ppe_policy_appendix_f.dotx")
- [**Appendix G:** ](/node/1628989)[Definitions](/sites/g/files/omnuum12696/files/2025-10/ppe_policy_appendix_g.docx "ppe_policy_appendix_g.dotx")



 

##  Related Resources 

### Forms

- [Disposal Request Form Notification to Place in Service Work In Progress (WIP) Form](https://oc.finance.harvard.edu/resources/forms-templates/fixed-asset-accounting)
- [Loan Term Calculator](http://hwpi.harvard.edu/os_fast/files/otm/loan_term_calculator.xlsx)
- [Offsite Equipment Notification Form](https://oc.finance.harvard.edu/resources/forms-templates/fixed-asset-accounting)
- [Untaggable Asset Item Form](https://oc.finance.harvard.edu/resources/forms-templates/fixed-asset-accounting)

### Policies

- [Accounting for Internally-Developed Software Policy](/accounting-internally-developed-software)
- [Accounting for Leases Policy](/accounting-leases)
- [CAPS WIKI - Includes forms, policies and procedures](https://wiki.harvard.edu/confluence/pages/viewpage.action?spaceKey=hppmcaps&title=Project%20Delivery%20Guideline)
- [Internal Transfers Policy](/pages/internal-transfers)
- [OSP Academic Service Centers Policy](https://osp.finance.harvard.edu/service-centers)
- [OTM website](http://otm.finance.harvard.edu/pages/debt-financing)



 

 



 

 See also:- [ Policy ](/page-type/policy)
- [ Accounting ](/policy-type/accounting)
- [ Payment ](/policy-type/payment)