1. Property Management
Capitalization Quick Review

2. Why It’s Important Subject to audit by our external auditors
Annual property review by ONR
Property reporting on sponsored agreements
Financial Statement impact

3. Capitalization Thresholds
Capitalized equipment has a cost of => $5,000 per single functional unit, inclusive of shipping and installation. Equipment to be capitalized must have a useful life of 1 year or more
Computer Software –with a cost of => $100,000 or more per license
Fabrications consist of purchases that can be
< $5,000, but are combined to form a single functional unit of equipment => $5,000

4. Equipment Line Items
Equipment => $5,000 – Computer Equipment Office
Office Computer Software Equipment => $25,000 per License
Equipment => $5,000 – Office & Communication
Equipment => than $5,000 – Research & Educational

5. Equipment Line Items continued…
– Equipment => $5,000 – Household & Furnishings
– Equipment => $5,000 – Medical Equipment
– Equipment => $5,000 – Vehicles
– Equipment => $5,000 – Farm & Construction Equipment
– Equipment => $5,000 – Other Capital Equipment

6. Equipment Component Line Items
Components increase the value of existing units of capitalized equipment or are combined to fabricate a unit of equipment with a cost of =>$5,000
Equipment Components < $5,000 – Computer Related
Equipment Components < $5,000 –
All Other

7. What does it mean when I pay something on a capitalized line item (5410XXX series)?
The item meets the definition of capitalized equipment
A WVU tag number prefixed with the alpha characters of ‘OCXXXXX needs to be affixed/assigned
An asset acquisition form or fabrication modification form should be submitted to Property Management
If the purchase does not result in an asset being added or increased in value in the Fixed Asset module, use a general expense line item

8. Coding Shipping/Freight on Equipment Purchases
Shipping charges should be coded the same line item as the equipment
If supply and equipment items are billed on one invoice – the shipping should be prorated between the items.
Contact Property Management to assist you with prorated shipping charges

9. Procurement Card Purchases
If you code a p-card purchase with a capitalized line item (5410XXX series), please send a copy of the invoice/packing list to Property Management upon receipt of the documentation.
Fax to Randy Powers at , or
Scan and copy to or
Mail to Property Management, PO BOX 6001

10. Examples
Tires are replaced on a vehicle – are they a component? – NO – expense line item
14 computers are $3,400 each that are to be individually functional for a total price of $47,600 – capitalize? – NO – use general expense line item
A specialized lens for a capitalized microscope is acquired – is this a component? – YES – use the component line item

11. Line Item Coding Tips
Repairs fall under the line item prefixed by 5340XXX
Replacement parts for units of equipment that do not increase the value fall under the line item prefixed by 501XXXX
General expense equipment (cost < $5000) fall under the line item prefixed by 501XXXX
Maintenance of existing equipment falls under the line item prefixed by 501XXXX

12. Line Item Coding Tips
Software with a value of < $100,000 should be recorded as a general expense:
Software < $5,000 should be coded
Software => $5,000 but < $25,000 should be coded

13. Property Management Internal Transfers
When items are coded incorrectly, Property Management will ask the department to fix the line item coding with an Internal Transfer (IT) or Property Management may create an IT to fix the error
If the department creates the IT to fix the error, please be sure to:
Reference the invoice number and period name of the original purchase in the description of the IT
Attach a copy of the original vendor’s invoice as support to the IT