Business Affairs

Regardless of the purchase method, when paying for capitalized equipment (unit value equal to or more than $5,000) the account codes in the 401XX/A801X series are to be used. Minor equipment (unit value is less than $5,000), uses the account code series, 202XX. (Full definitions of account codes at this link)

When a Banner invoice is processed using capital equipment account codes, the invoice is routed to an approval queue that is monitored by Property Control. Each asset purchased is then added to the Fixed Assets system using invoice data. Therefore, it is important that all pertinent information be in the text field (FOATEXT) of the invoice, including: 

• Description of equipment purchased
  • Model name and number
  • Manufacturer
  • Serial number
• building and room number where equipment will be located
• Name of User/Lab/Office equipment is intended for
• Date expected to be in service

Pcards are not to be used in the purchase of capital equipment, except in the case of constructed assets (see below). However, more recently PCS has authorized exceptions for this, so reconciling your purchases and having the correct account codes attached is very important (and subject to audit). For more information on how to purchase equipment, please visit Purchasing and Contracting Services. 

Defective capital equipment can be exchanged under the vendor or manufacturer warranty - a process sometimes called a "return merchandise authorization" (RMA). You must notify Property Control if this happens. A new tagging appointment will be set, and depreciation may be adjusted. 

A trade-in involves the disposal of equipment, with a value given by the vendor towards the purchase of new capital or minor equipment. Items acquired by trade-in are capitalized at their full value, not the amount after it was reduced by a trade-in allowance. 

Please see our Disposal page for more information on trade-ins. 

An Intent to Construct Capital Equipment form must be completed and forwarded to Property Control in order to capitalize costs for a constructed asset. 

Definition

Constructed equipment is comprised of a number of individual components that are fabricated/built into a single functional unit. It is capitalized as a single asset for a combined total cost in excess of $5,000 and a useful life greater than one year. Typically these components would be purchased with separate transactions and may be from multiple vendors. All components must function as a singular unit and will be collectively disposed of at the end of the useful life of the equipment. The asset with all assembled parts must be physically affixed to each other and found in one location at all times. If audited, departments must be able to justify the capitalization of constructed equipment. 

What is not included?

• Components greater than $5,000 which are not physically attached or can function independently should be considered stand-alone capital equipment. Items less than $5,000 should be expensed. 
• Connecting components together in a system (physically or virtually) does not constitute an equipment fabrication (e.g. when individual computers and servers are joined to create a network). 
• If a computer is purchased because it is required to run complex scientific equipment and the constructed equipment cannot function without it, the computer can be capitalized as part of the asset. However, the computer MUST be used strictly for that fabricated equipment and cannot be used in any other capacity. 
• Network and communication wiring cannot be capitalized as equipment
• Software that is leased or licensed for use and which is separately itemized on a vendor invoice cannot be capitalized. 
• Faculty time used to construct the asset is not included, but the work of an putside specialty shop may be. 

Payment

The UO allows equipment expenditures using PCards for the construction of capitalized equipment using account code 40199 (Construction in Progress Equipment or CIP) and for service centers and auxiliary funds account code A8014. When distributing PCard charges utilizing these account codes, the assigned asset number and amount must be added to the journal voucher text field. No other capital equipment expenditures are allowed using PCards without PCS approval. This includes attachments for existing capital assets. 

Attachments are parts purchased to be incorporated into an existing capital asset. Attachments are depreciated and disposed with the parent asset. The $5,000/unit does not apply. Parts related to maintenance and repairs are not attachments and are to be expensed. 

Since attachments are additions to capital assets, they should use the corresponding capital asset account code, regardless of value. Please state in FOATEXT which UO capital asset number (000XXXXXX) the attachment adds value to. 

All gifts-in-kind need to be reported to the UO Foundation and to Business Affairs in a timely manner by the receiving department. This ensures that donors receive proper acknowledgement, and that the gifted property is entered into Banner Fixed Assets if it meets the criteria for a capital asset. 

Please see the Finance and Accounting page "Procedures for Gifts in Kind" for more information. 

Accurate location and department data for every asset is integral to our system. Equipment managers must notify Property Control of transfers of capital equipment. For multiple assets, please use an Asset Maintenance Form.

Transfers include but are not limited to: 

• Acquiring a capital asset off the surplus website
• A move or transfer from one department to another department
• A long-term move from one location (building or room) to another
• A move off-campus for University business
• A lab or unit moving under the umbrella of one department to another

When a transfer of equipment between departments includes financial compensation, Property Control can assist departments with the completion of a Journal Voucher (JV) in Banner. 

When a department receives capital equipment from another institution or state agency, Property Control needs to be notified in order to record the asset information in Banner. The department must request from the transferring institution: current market value, age, description, serial number, funding source, condition and federal accountability. 

Equipment transferring to UO from other institutions with new faculty should be reviewed and documented immediately upon receipt. This property becomes UO property (not personal property of the principal investigator) and must be added to the inventory in order to be tracked and insured. 

In general, the UO does not accept responsibility for non-University owned property that is damaged, lost, or stolenm unless it is registered officially as a loaned asset. 

When property is loaned to the University for official use, all arrangements must be approved in writing by the department head, and Purchasing and Contracting Services. Loaned property will be registered in our Banner database with capital assets, but it is not usually subject to the same inventory requirements. Whenever the loaned item is returned, please inform Property Control. 

Faculty and staff members who keep personal items at the University should label those items to indicate private ownership. Unless there is a written agreement approved by Business Affairs, personal equipment is used at the owner's risk. 

Leased equipment, regardless of cost, is tracked in our Banner fixed asset database to comply with GASB rules. As with any other asset, if a leased asset (such as a copier) is replaced, removed, or relocated, please notify Property Control. 

Any new lease contracts should be reported to Property Control.