Per University specifications, the Property Accountant capitalizes any equipment in general that has a value of $5,000 or over. This value can be determined from the purchase price at the time the equipment is bought or the fair market value of assets acquired through donations to the university. All costs reasonable and necessary to obtain the asset, including component parts and shipping, are included when determining the cost of the asset and its capitalization value. Other information necessary to capitalize an asset includes, but is not limited to:
- Item description
- Serial number
- Physical location
For most equipment purchases, the Property Accountant is notified through Accounts Payable at the time of payment. If a piece of equipment has various component parts purchased at different times or from different vendors, the department should notify the Property Accountant to ensure proper capitalization.
With respect to the capitalization of computers, if an invoice for a computer system is itemized such that all the component parts of the system are easily identifiable, only those individual parts over the capitalization limit will be individually capitalized, generally the CPU and possibly the monitor. For those systems on which a component part breakdown is not readily available, efforts will be made to capitalize only the computer, not the software or licensing. Software is generally expensed unless it is a large systems purchase.
All donations of equipment to the university are to be processed through the university’s Development Office. The Development Office will then notify the Property Accountant and the asset will be capitalized appropriately.
All capital assets should be tagged with a Bradley University property tag by the Financial Services when they are placed in service. The only exception would be items purchased through Computing Services, which are tagged when they are installed. If your department has an item which needs tagging, please contact the Property Accountant to arrange a convenient time for tagging.
Throughout the year, departments may find themselves with equipment that is not used, is broken or has outlived its useful life. In these instances, the Property Accountant must be notified and approve the disposal as there are different methods of disposal, depending upon the equipment type. If the Property Accountant approves the disposal, a Property Control Form must be completed by the department and submitted to the Property Accountant prior to the disposal.
Certain equipment might not be useful to one department, but may be needed in other areas. In these instances, the asset may be transferred to another department. A Property Control Form must be submitted to the Property Accountant when this occurs.
For any other questions regarding capital equipment, please contact Financial Services.