Departments may rent or lease rather than purchase equipment under the following conditions per FASOM 13.01 E:
- It is needed for a short time
- It is highly sophisticated and has low durability or quickly becomes obsolete
- Its value is more than $5,000, and benefits or fixed-term costs associated with leasing make it more attractive than purchase
- Company maintenance personnel are key factors, e.g., data processing equipment.
Equipment rented on a month-to-month agreement with no fixed term is considered a rental. Equipment rented on an agreement with a fixed term (longer than one month) is considered to be leased equipment. The Director of Business Affairs must approve all lease or lease/purchase contracts. Printing Services no longer handle copier leases for departments. See thePurchasing and Contracting Servicesweb page for more information.
Leased equipment must be reflected on the inventory records for insurance purposes. When a piece of leased equipment (such as a copier) is replaced, the inventory records must be updated to reflect the removal of the old equipment. See theAdd Propertyweb page for more information.
A lease may be either an operating or a capital lease. Capital leases are considered to be similar to a purchase and are subject to special rules. See the "Lease Test" belowfor the four-part test for determining the status of a lease.
As part of the Closing of the Books at fiscal year end, the Office of Business Affairs is required to report to the Controller's Office the remaining lease payments owed in future years for all leases held by the University of Oregon. This includes operating leases and capital leases. The Lease memo belowis sent to all departments annually in early June to update the list of current leases for the preparation of this report.