Capital Equipment/Software & Amortization

LAST UPDATED: December 14, 2017

What You Should Know

Capital equipment is defined as an item of tangible personal property with a cost of $5,000 or more and a useful life of more than one year. Please refer to the capital equipment policy for more detailed information.

Capital software is defined as an application, operating system, infrastructure, utilities, and upgrades, and has the following characteristics: (a) the software is acquired, internally developed, or modified solely to meet the University’s internal needs and (b) during the software's development or modification, no plan exists to market the software externally. Please see the software capitalization policy for more detailed information. Generally, purchased software applications that are in excess of $100,000 are capitalizable.

Capital Equipment/Software Coding

Capital equipment/software may be charged to certain expense accounts, depending on the type of equipment/software. For guidance on the correct account code to be used when booking the purchase, see the Account ChartField webpage.

Purchases using appropriately restricted gift, endowment, start up, or other non sponsored funds are charged to the appropriate fund. Purchases supported by general funds appropriations are charged to fund A0027 if amortized and A0026 if purchased outright. Equipment/software budgeted and approved on a sponsored award should, whenever possible, be purchased against the relevant GXXXX fund.

For more information about capital equipment/software budgeting, please contact the Associate Controller.

Amortization

Amortization is a funding mechanism that allows the cost of an item of capital equipment or software to be spread to a department’s operating fund over several fiscal years. The expense is amortized usually over the equipment’s or software’s useful life, which varies depending on the type.

Principal is charged annually to an operating fund chartstring, usually specifically designated for this purpose. In order to amortize an item of equipment, specify the A0027 fund on the purchase order. You also will need to provide the controller’s office with the operating chartstring that will pay the principal.

For more information about amortization, please contact the controller’s office.


 

CONTACT US

finance@princeton.edu
Tel (609) 258-3080
Fax (609) 258-0442

Princeton University
Office of Finance & Treasury
701 Carnegie Center
Princeton, NJ 08540

Google Map
Princeton Shuttle

FINANCIAL SERVICE CENTER

7 New South
Tel (609) 258-3080
Fax (609) 258-5040
Open Monday through Friday,
8:45 am — 5:00 pm

SERVICES INCLUDE

Customer service, cashiering,
check pick-up, financial system access

FINANCE NEWSLETTER

The General Ledger is your link to updates on people, policies, and other information related to financial transactions at the University.

Download Current Issue
Download Past Issues
Subscribe

WE WANT YOUR FEEDBACK!

How can we better serve you? Submit comments, questions, and ideas to our customer service department.

finance@princeton.edu