Hubbell Policies
DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT POLICY
English
Owner : Vice President, Controller
Last Review: 2014.09.05
FIN – 20
Department: Finance
POLICY
This policy requires all depreciation of property, plant and equipment ("PPE") to be reported in accordance with established procedures and guidelines.
SCOPE
This policy applies to all Hubbell business units.
PURPOSE
The purpose of this policy is to ensure compliance with United States Generally Accepted Accounting Principles ("GAAP") and to ensure consistency in the application of these principles across all Hubbell business units in accounting for PPE.
PROCEDURE
Depreciation of property, plant and equipment ("PPE") shall be recorded for book purposes on a straight- line basis by allocating the cost of the asset ratably over its estimated useful life with no reduction to the depreciation expense for expected salvage value.
In the period of acquisition, one month of depreciation should be recognized.
Required PPE useful life guidelines by category will be as follows:
Type
Life
Land Improvements
10-20 years
Buildings
45 years
Building improvement Machinery & equipment Leasehold improvement
10-20 years
5, 10 or 15 years
Shorter of estimated life of the improvement or the remaining term of the lease.
Furniture
10 years 5 years 3-5 years
Office equipment
Electronic equipment Molds, Tools, Dies
3, 5 or 10 years
Autos
5 years
Capital investments for betterment, adaptation or restoration, exceeding the stated cost and useful life threshold should be capitalized and included in the fixed asset subledger in accordance with the "Procedure for Capitalization of Property, Plant and Equipment". If the useful life of an asset would be extended as a result of the aforementioned capital investment, the aggregate remaining net book value of the asset plus the capital investment should be depreciated over the new extended life of the asset. If the capital investment is made for the purpose of increasing the efficiency, without extending the life
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