Best Practices for Optimizing Depreciation Through Building Componentization

September 15, 2021

Building Componentization
building depreciation components

Building componentization is the segregation of building “parts” into components that roll up into Building Shell, Building Services, and Building Fixed Equipment. 

What you need to know about building components: 

“The entire building, including the shell and all components, may be treated as a single asset and depreciated over a single useful life. A building may also be divided into multiple components. Each component item may then be depreciated over its estimated useful life” – Uniform Guidance § 200.436

Tips to optimize your building depreciation recovery:

  1. A  building provides the most benefit when:
    1. There is significant research activity
    2. It is expensive
    3. It is university paid
  2. Be on the lookout for major construction projects since your last proposal. It’s important to communicate with Space Management and Facilities. 
  3. Know when new research-intensive buildings are coming online. Key dates to know:
    1. Completion date
    2. Occupancy date
  4. Know which departments are moving into new spaces and what will happen to the space they vacate. 
    1. “Decompression” is great!
    2. You’re essentially spending the same dollars, but gaining more space. 
  5. Know the nature of the research activity, including PIs with established research portfolio vs. new faculty. 

At HCA, we want to help you realize the maximum benefit as quickly as possible through Building Componentization. Your facilities have a unique relationship to your organization, and we’re here to work closely with you to support your goals through:

It starts with a conversation. Let’s set up a time to talk.