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• Sales, use, and other taxes imposed on the acquisition <br /> • Installation charges <br /> • Charges for testing and preparation for use <br /> • Cost of reconditioning used items when purchased <br /> • Parts and labor associated with the construction of equipment <br /> Note: Cost of extended warranties and/or maintenance agreements, which can be <br /> separately identified from the cost of the equipment, should not be capitalized. <br /> Infrastructure <br /> Infrastructure assets are long-lived capital assets that normally are stationary in nature <br /> and can be preserved for a significantly greater number of years than most capital assets. <br /> Infrastructure assets are often linear and continuous in nature. <br /> Examples of expenditures to be capitalized as infrastructure: <br /> • Highways and rest areas <br /> • Roads, streets, curbs, gutters, sidewalks <br /> • Bridges and tunnels <br /> • Dams and drainage systems <br /> • Water and sewer systems <br /> • Electric and gas (main lines and distribution lines) <br /> • Street lighting systems (traffic, outdoor, street, etc.) <br /> • Signage <br /> Infrastructure assets should be capitalized and depreciated. Improvements made to <br /> infrastructure assets that extend the useful lives or increase the value of the assets, or both <br /> should be capitalized. <br /> Other Capital Assets <br /> Computer software that is either purchased or developed for internal use should be <br /> capitalized as other fixed assets if the cost of the computer software exceeds the <br /> capitalization threshold and depreciated over the estimated useful lives of the assets. <br /> Capitalization of computer software includes software license fees if the total dollar <br /> amount of the fee divided by the numbers of units served (terminals) exceeds the <br /> threshold. <br /> Examples of expenditures to be capitalized as computer software: <br /> • External direct costs of materials and services (third party fees for services) <br /> • Costs to obtain software from third parties <br /> • Travel costs incurred by employees in their duties directly associated with <br /> development <br /> • Payroll and payroll-related costs of employees directly associated with or <br /> devoting time in coding, installing or testing. <br /> 8 <br /> 68 <br />