NEW CAPITALIZATION LIMIT

Effective July 1, 2003 the University raised the limit for the Quick Order from $1,000 to $5,000. The University also raised the capitalization limit of equipment from $1,000 to $5,000 to avoid administrative issues with capital items on quick orders and to reduce everyone's work in tracking and accounting for this equipment. This means that items previously considered as capital items will be expensed if under $5,000 after July 1, 2003.

As with all changes there are transitional issues that need to be discussed below, however, I would like to clarify what we should have been doing before this change. There are only three official subcodes (categories) for charging items of capital equipment to sponsored programs (4-2XXXX series of accounts). You and your staff should use these categories when developing the proposal budget and when charging items to your 4-2XXXX account. These subcodes in the general ledger (OFIS) are four digits (in RIAS a following zero has been added). They are:
2240* Permanent Equipment Less than $1,000
7050 Additions & Improvements - Buildings & Grounds
7260 Permanent Equipment $1,000 or More
* Included in MTDC (Modified Total Direct Cost) for F&A calculation purposes.

The titles and descriptions of these subcodes were changed effective July 1, 2003 on our web site and budget template and a request has been submitted to change the the titles on OFIS.

1. Existing Awards as of June 30, 2003: These awards would be allowed to use the old capitalization limit of $1,000 until the earliest of the next funding period for the award or the end of the award. In no case would this phase-in period extend beyond June 30, 2004.

2. New Awards received after June 30, 2003: These new awards would have the budgets adjusted for the limit before the University accepts the award. The Office of Research and Sponsored Programs will coordinate this with the departments receiving the award.