Capital Equipment Acquisition

Capital equipment is purchased in compliance with standard purchasing policies and procedures as prescribed by the Office of Finance and Treasury. Capital equipment purchases must be acquired via a requisition unless prior approval is provided by the Office of Finance and Treasury.   Donations of capital equipment must follow guidance and processes established by the Office of Advancement.   The Office of the Controller must be notified of any transfers in of capital equipment, or other non-purchase acquisitions.

Costs capitalized with the equipment:

• Any initial modifications, attachments, accessories, or auxiliary apparatus that are necessary to make an item of capital equipment useable for its acquired purpose.
• Shipping charges, protective in-transit insurance, freight, and installation costs.
• Betterments or improvements as defined above.

Cost that should NOT be capitalized with the equipment:

• Equipment repair costs. 
• Separate warranty costs or maintenance contracts.
• Demolishing or dismantling costs.
• Spare or replacement parts.
• Training costs that can be separately identified

For equipment purchased from sponsored research funds, the Department Administrator and Principal Investigator (PI) are responsible for ensuring compliance with sponsor agreements.   Equipment purchases funded by a Sponsored Research Project within 90 days of award expiration are normally not allowable unless a justification is given by the PI, such as:

• The purchase is necessary to complete the research.
• The PI is expecting the project to be extended. The department must have adequate funding in a non-sponsored chartstring to be used to cover the cost of the capital expenditure in the event the sponsored funding does not materialize.
• The PI has sponsor approval to purchase equipment within 90 days of award expiration.

Software

Operating and communication software should be capitalized when purchased with hardware if the combined purchase meets the capital equipment threshold. Subsequent or separate purchases of software may be capitalized based on the Software Costs Policy.

Aggregated Items

The accounting convention called “initial complement of equipment” allows the capitalization of a large number of smaller items of tangible personal property which would have a useful life of more than one year. This might be applied when a portion of a building is being refurbished and some of the new furnishings cost less than $5,000 each, but more than $5,000 in the aggregate. Consult with the Office of the Controller to determine the appropriate treatment of these items.

Fabricated Equipment

Fabricated equipment constitutes equipment that cannot be acquired “off the shelf” but must be fabricated from individual components. For more information see: Fabricated Equipment Policy.

Capital Equipment Records

All capital asset records must be properly maintained. The Office of Finance and Treasury uses an asset management module in Prime Financials to track the capital assets.   Custodians are responsible for tagging capital equipment with bar coded tags provided by the Office of the Controller and for updating the initial capital equipment record in the Prime asset management module with relevant information, including manufacturer, model number, serial number, location, and other details about the asset within 30 days of receipt.   Updates to this information, as well as changes to equipment condition, location, custodian, transfers, and disposals, must be entered within 30 days.

For capital equipment purchased with federal funds, a maintenance repair record must be kept as long as the asset is in use, and the maintenance record should be attached to the equipment record.

A physical inventory of all capital equipment is conducted at least every two years.   The equipment custodian conducts the inventory by physically locating the equipment and updating the equipment record as needed.   The Office of the Controller will perform inventory validations.

Lost, Stolen, or Damaged Property and Equipment

Departments must report all incidents resulting in equipment loss, damage, or destruction to the Department of Public Safety and the Department of Risk Management. Departments must update the equipment record in the Prime asset management module.

Disposal

All sales and other disposals of equipment must first be entered and approved in the Prime Asset Management module, receive approval, and be coordinated through the Resource Recovery Program on the nature of the equipment or the disposal, EHS may need to provide approval prior to disposal. The Office of the Controller reviews these and all other requests and approves or denies disposals.  

The University owns the property title to all equipment unless specifically stated otherwise in the applicable sponsored award terms and conditions.

The Controller's office will notify ORPA as needed for confirmation on certain disposals, transfers, etc. of equipment purchased on sponsored funds. Disposal of equipment involving the transfer to overseas locations, or to foreign persons in the United States, should be reviewed by ORPA for compliance with US government export control regulations. The federal sponsor routinely reserves the right to assume title to capital equipment that is purchased with federal funds through final close-out of the award. In rare cases, the sponsor may request title after the award has been closed. ORPA handles those requests on a case by case basis.

If a Principal Investigator transfers from the University to a new institution and wishes to transfer capital equipment items, the Department must enter the request in the Prime asset management module and receive approval from ORPA before the capital equipment transfer can take place. The Office of the Controller will assist in establishing fair market value of any equipment sold or transferred to another institution.

Any equipment that has come in contact with hazardous materials, has been noted as hazardous in the Prime asset management module, or in any way requires decontamination or removal of hazardous components during disposal requires approval by Environmental Health and Safety (EHS) prior to disposal.