Componentisation calculator
One building, two treatments the same manual permits, and the gap between the annual charges they produce.
The seamThe project that captured cost one way and the accounts that have to depreciate it another, with nobody recording which of the permitted treatments was used.
A project arrives as one number and has to leave as several. IPSAS 45 paragraph 41 requires each part with a cost significant in relation to the total to be depreciated separately, and paragraph 8 declines to prescribe a unit of measure. The entity therefore chooses, and the choice moves the annual charge more than anything else it will decide about the asset.
For 12 families of building, the Ministry’s manual publishes both treatments of the same asset: the whole building as one unit, and separately its structure, its services and its finishes, each with its own range. So this needs no illustration from us. The one thing you supply is how the cost divides, which no published table could give you.
The 12 classes where the manual gives a whole-unit life and component lives for the same asset.
The amount to be capitalised, after any work in progress has been resolved.
- Depreciated as one unit, 30 to 50 years
- 1,600,000 to 2,666,667 a year
- The Ministry’s manual, Permanent administrative building (unit) (مبنى إداري دائم - وحدة). Permitted, and it is what most entities do, because it is one row rather than three.
- Componentised
- 2,106,667 to 3,000,000 a year
Part Cost Life Annual charge Structure 48,000,000 40 to 50 years 960,000 to 1,200,000 Services 20,000,000 20 to 30 years 666,667 to 1,000,000 Finishes 12,000,000 15 to 25 years 480,000 to 800,000
The lowest defensible annual charge is 1,600,000 and the highest is 3,000,000, which is 88% apart. Both are inside what the manual permits, on the same building, from the same table.
Two unrecorded judgements compound to produce that: whether to componentise, and where in each range to sit. Neither is written down in most sets of accounts, and IPSAS 45 paragraph 48 then asks for the useful life to be reviewed annually. How far to componentise and which end of the range to record are both standing proposals here, each with what would show it wrong.
Every life above is the ministry’s. Nothing on this page assumes a life, and the split is yours. Checked against the Ministry-hosted file on 23 September 2026. There is no automated way to detect a new edition, so check the Ministry before relying on this against a current submission.
Componentisation
2026-10-01. projects-advisors.com/tools/capitalisation
Permanent administrative building · مبنى إداري دائم, 80,000,000 of capital cost. As one unit, 30 to 50 years, the annual charge is 1,600,000 to 2,666,667. Componentised it is 2,106,667 to 3,000,000. Lowest to highest, 88% apart.
| Treatment | Life, as published | Annual charge |
|---|---|---|
| One unit | 30 to 50 years | 1,600,000 to 2,666,667 |
| Structure60% of cost | 40 to 50 years | 960,000 to 1,200,000 |
| Services25% of cost | 20 to 30 years | 666,667 to 1,000,000 |
| Finishes15% of cost | 15 to 25 years | 480,000 to 800,000 |
| Componentised, total | Per part above | 2,106,667 to 3,000,000 |
Lives from Saudi Ministry of Finance, Comprehensive manual for the census and valuation of assets of government entities, Second edition, approved 10 September 2022, Ministry-hosted rendering, section 5.2, pages 78 to 152. Class names in English are a Projects Advisors translation of the Ministry’s Arabic. The cost split is the reader’s own and is not from any published table. Rates per unit of cost: one unit 2 to 3.33 per 100. Kept current at projects-advisors.com/tools/capitalisation
Computed from
- IPSAS 45, property, plant and equipment (2023, effective 1 January 2025; read 2026-09-01)https://www.ipsasb.org/publications/ipsas-45-property-plant-and-equipment
- Saudi Ministry of Finance, comprehensive manual for the census and valuation of assets of government entities, Arabic (Second edition, approved 10 September 2022; the rendering the Ministry hosts; read 2026-09-23)https://www.mof.gov.sa/C2A/Knowledge_Center/Documents/%D8%A7%D9%84%D8%AF%D9%84%D9%8A%D9%84%20%D8%A7%D9%84%D8%B4%D8%A7%D9%85%D9%84%20%20%D9%84%D8%AD%D8%B5%D8%B1%20%D9%88%D8%AA%D9%82%D9%8A%D9%8A%D9%85%20%D8%A7%D9%84%D8%A3%D8%B5%D9%88%D9%84%20%D9%84%D9%84%D8%AC%D9%87%D8%A7%D8%AA%20%D8%A7%D9%84%D8%AD%D9%83%D9%88%D9%85%D9%8A%D8%A9.pdf