Question: Some of the individual items that could be included in the purchase of bundled technology, such as the warranties, shoulder straps, and bags, would not meet the cost and criteria for capitalization as described in a previous question regarding GAAP and capitalization. If the district included some of these otherwise non-capitalized items in the bundled price, does that violate GAAP regarding capitalized assets?
Answer: No. The fact that the district bundled costs for purchasing purposes does not change how the district will record assets. GAAP requires that capital/fixed assets be reported at historical cost including ancillary charges necessary to place the asset into its intended location and condition for use. Therefore, the cost of the capitalized asset could include warranties as well as shoulder straps and bags under GAAP, but would not include costs such as contracted technical services, for example. The Declaratory Order has not changed this GAAP guidance.