Equipment that has an acquisition value of $5,000.00 or more, is freestanding, and has a normal life expectancy of one year or more.

You may use a Purchase Order to purchase capital equipment. It should be charged to the account range of 61000 – 61021.

Capital equipment must be disposed of according to University Procedures. (See Policy 3-040)

It is required that capital equipment is physically inventoried on an annual basis.

The Property Accounting Office is updating the Noncapital Equipment Account Codes in response to the recent revision of Policy 3-041: Accountability for Noncapital Equipment. The revisions introduce THREE CATEGORIES of assets, each with specific inventory requirements:

1. MANDATORY INVENTORY (Cost: $3,000 - $4,999):
   • Noncapital equipment with an acquisition cost greater than or equal to $3,000 but less than $5,000.
2. MANDATORY INVENTORY (Specific Items):
   • All university-owned computers, laptops, tablets, and cell phones of any value less than $5,000 that may contain Personally Identifiable Information (PII) at any point during the university’s ownership of the asset.
3. OPTIONAL INVENTORY (Cost: Less than $3,000):
   • Noncapital equipment having an acquisition cost or donated value less than $3,000 and having a useful life in excess of one year. Assets in this category are to be inventoried at the discretion of the departments or units, but not required.

Noncapital Equipment Account Codes

Note: There are no changes to the capital equipment account codes (61000-61021), applicable for all assets, including computer-related devices over $5,000.

For further inquiries, please contact Property Accounting employees:

• Paula Monaco: 581-8673
• Pamela Day: 585-6969
• Robin Love: 581-3973

Equipment that is constructed by combining or assembling modular components and/or materials into one identifiable unit is referred to as fabricated equipment. When completed, each component loses its individual identity, and the end product becomes an identifiable single unit. Typically, such equipment is made or designed in-house for a specific purpose. In order to be capitalized, the finished product must have a unit cost of $5,000.00 or more and a life expectancy of more than one year.

Notes:

1. University labor costs related to equipment fabrication by an approved recharge center qualify for inclusion in the capitalized cost. All other University labor costs are not allowed to be capitalized as a part of the fabricated project.
2. The purchase price on individual components does not have to exceed $5,000.00, as long as the total combined price of the end product is equal to or greater than $5,000.00. If a fabricated project is approved, then the individual items must be purchased using a fabricated equipment account in the range of 61100 – 61119.
3. Repair of existing equipment, regardless of the cost, is not fabricated and is subject to F & A costs.
4. If there is an upgrade of existing equipment, which result in the existing equipment implementing new technologies (not just an upgrade or repair of existing technology) and the total of the components of the upgrade are greater than $5,000.00, then the purchase of the components are not subject to F & A costs.

Procedures

Prior to beginning a fabrication project, departments are required to complete and have approved a Notice of Intent to Fabricate form. The form must be approved by Property Accounting before purchases can be made. When a fabrication project is approved, a copy of the approval will be sent to the department, with identification of the asset number assigned to the project. Departments cannot begin ordering items for a fabrication project until they have received the approval form, including the asset number.

When approved, all purchases for fabrication projects should be charged to an account within the range of 61100 – 61119. The fact that a specific purchase is for an approved fabrication project should be indicated on the purchasing documents used, i.e., Purchase Requisitions. The approved asset number must be indicated on all purchasing documents. The Purchasing Department will not process documents charged to the account number range 61100 – 61119 without the assigned asset number. A copy of the purchasing document should be sent to Property Accounting at the time it is created.

At the conclusion of the project, the department should advise Property Accounting that there will be no further purchases. Property Accounting will then prepare a list of all component purchases on the project and send it to the department with the asset number attached. Any discrepancies will be the department’s responsibility to correct.

Ushop Purchase Request PO PDF Training guide

In order to have uniformity in accounting for additions to capital and insurable equipment, the following guidelines shall be followed:

1. “Repair” or “maintenance” expenditures shall be recorded as a current expense regardless of the amount. A repair or maintenance expenditure is one that maintains the property at its existing level or existing life of service, such as painting, repair, miscellaneous parts, and normal servicing
2. In general, additions to equipment costing less than $1,000.00 shall not be recorded as equipment. An exception occurs when the original equipment and the addition are purchased within a 12-month period. The addition becomes an integral part of the original purchase (to produce a single functional unit), and the addition significantly extends the useful life or substantially increases the value or capability of the equipment.

If the result of the addition increases the aggregate cost of the equipment, but the total is still less than $4,999.99, the addition shall not be recorded as a capital asset. If the result of the addition increases the aggregate cost to $5,000.00 or more, the addition shall be recorded as capital equipment and the original purchase cost should be transferred to a capital equipment account by journal entry to correct.