This is from the hud.gov website:
The cost of buildings should include not
only the cost of the structure itself but also
the costs of all permanent equipment and
fixtures necessary for the intended use of
the structure, such as boilers, furnaces, air
conditioners, elevators, permanent floor
covering, wiring, and lighting fixtures
Cost Basis When Assets Are Replaced or Traded-In:
When an entity acquires a new asset and disposes of an old
asset of like kind and PHAs are able to identify the cost and
accumulated depreciation associated
with the old asset, PHAs should eliminate
the cost of the old asset from the
accounts and record a gain or loss on its
disposal. Then PHAs can debit the cost
of the new asset to the proper asset
account. Assume that the entity had an
air conditioner that originally cost
$40,000 and had recorded accumulated
depreciation in the amount of $35,000.
If the entity could not determine the
exact cost, the entity should estimate the cost and the depreciation
taken to date. Assume the replacement unit had a cost of
$70,000. Exhibit 2 illustrates the entries required to account
for this transaction if the PHA uses Enterprise Fund accounting
https://www.hud.gov/offices/reac/pdf/gaapflyer2.pdf
At first I thought it would be equipment too, but after reading this i see now that it should be classified as part of the building.
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