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West Virginia University Policy
Division of Administration and Finance

Policy Number: IARA-04

General Information

Reason For This Procedure:

  • To establish guidelines to define depreciable and amortizable assets, determine useful lives, and the method of allocating depreciation and amortization costs in accordance with governmental accounting standards as established by the Governmental Accounting Standards Board (GASB).

To Whom Does This Procedure Apply:  

  • This Procedure applies to all West Virginia University departments, including those on the regional campuses - Potomac State College of WVU, WVU Institute of Technology, Charleston division of the Robert C. Byrd Health Sciences Center, Jackson’s Mill State 4-H Conference Center and Camp, and the WVU Farms – and the West Virginia University Research Corporation.



Allocation of the total acquisition cost of a capital asset over its estimated useful life.




Allocation of the total acquisition cost of an intangible asset over its estimated useful life.


  • Land, construction-in-progress, and inexhaustible works of art, collectibles and similar assets are not depreciated. Intangible assets with indefinite useful lives are not amortized. 
  • Annual depreciation (or amortization) expense is calculated using the straight-line method by dividing total asset cost by estimated useful life in years. The estimated useful life of an asset is the period over which services are expected to be rendered by the asset. A full-month convention is used, that is, property placed in service at any time during a given month is considered to be placed in service on the first day of that month. This allows depreciation (or amortization) to be allocated for the entire month in which the asset is placed in service while no depreciation (or amortization) is allowed for the month of disposition. Salvage value of depreciable assets is assumed to be zero, except for vehicles which have a salvage value of 20%. 
  • As many factors may affect the useful life of an asset, a periodic review of estimated useful lives will be performed.


Procedure Development

  • The responsibility for procedure development of this policy rests with Institutional Accounting, Reporting and Analysis.


  • The responsibility for implementation of this policy rests with Institutional Accounting, Reporting and Analysis.


  • The responsibility for interpretation of this policy rests with Institutional Accounting, Reporting and Analysis.


  • Additional information or questions regarding this procedure can be obtained by contacting the Institutional Accounting, Reporting and Analysis at 304.293.4008.

Related Documents

  • West Virginia University’s Capitalization Policy provides definitions of capital and intangible assets and the total cost of an asset.
  • The Higher Education Depreciation Setups document provides the estimated useful lives of depreciable assets.


Originally Issued: July 1, 2010
Updated: February 8, 2016
Approved by: Daniel A. Durbin, Senior Associate Vice President for Finance