Definition of Equipment
The university generally defines equipment as those items acquired by purchase, gift or assembly, which have the following characteristics:
a. Appearance and life. Equipment has a useful life of one or more years while retaining its general appearance and shape.
b. Repair ability. Equipment is non-expendable, If the item is damaged or worn out, it is usually more feasible to repair the equipment than to replace it.
c. Maintenance of Identity. Equipment does not lose its identity when it is incorporated into a different or more complex unit.
2.1 Capital and Minor Equipment
To assist in determining the proper G/L account number for equipment-type expenditures and when asset numbers should be created, the definition of equipment is further categorized into the following.
a. Movable equipment: These are items of a movable nature, which have a cost or fair value at the time of acquisition of $ 2500 or more. An asset number must be created for all movable equipment and furniture and the items must be tagged.
b. Sensitive minor equipment: These are equipment items of a movable nature which are particularly vulnerable to theft and have a cost or fair value between $ 600 and $ 250. The following specific items are (as an example) required to be recorded as sensitive minor equipment.
Binoculars, Cameras, Camera-lenses ( 200mm and larger), Computers, CD writers, External Computer storage devices, External computer modems, Fax machines, Radios and Receivers, Two-way radio transmitters and receivers, Video cameras, Video recorders and players, monitors , Cell phones “ mobiles” etc….
An assert number must be created for all sensitive minor equipment and the items must be tagged. All expenditures for sensitive minor equipment must be recorded with an asset number in the university assets records.
c. Fixed equipment: Fixed equipment includes non-movable items such as built-in shelving and cabinets, light and plumbing fixtures, boilers, and other such built-in mechanical or electrical equipment that become an integral part of a structure. Asset numbers are not required for fixed equipment.
d. Accessory items and component parts: These items are significant, identifiable parts of an equipment item which do not function alone, but can be readily moved and used as a component of another equipment item. Accessories or components are acquired as part of another equipment item or acquired independently to be used as part of an item. Generally, these items should be considered as part of the basic equipment. Therefore, accessories and components of movable and sensitive minor equipment should be entered into the asset records as sub assets of the basic equipment item. Expenditures for these items should be recorded with the same G/L account number as was used for the related basic equipment.
e. Replacement parts:Regardless of cost, replacement parts should be classified as “Maintenance and Repairs”, and not as equipment. For example, if a motor for a piece of machinery is replaced at a cost of $5000.00, the item is properly classified as maintenance expense, and not as equipment. However, if a new machine is purchased to replace an old machine, the new item should be classified as equipment.
f. Assembled equipment. This category includes equipment items assembled by the university from parts purchased independently. The cost of the assembled equipment will be the sum of the costs of parts used to assemble it. If the cost and nature of the new equipment item causes it to be categorized as movable or sensitive minor equipment/ furniture, then an asset number should be created for it.