Equipment Definitions for Consumable Versus Capital Expenditures

Concurrent with the receipt of a new indirect cost rate, the University is formalizing its policy regarding consumable versus capital equipment expenditures. Equipment purchases must now be classified as either consumable or capital expenditures. In Banner, there are separate ranges of accounts to distinguish between consumable and capital equipment purchases. Capital equipment is recorded in account range 700145-720215 and is defined as equipment with a total cost of $5,000 or greater. Consumable equipment, which has a total cost of $4,999 or less, must be recorded in account range 620017-620057. 

This policy applies to all University orgs except for federal sponsored agreements with the 45% indirect cost rate. Federal sponsored agreements at the 45% indirect cost rate are still subject to the prior definition, which defines capital equipment as costing $500 or greater and is recorded in accounts 700145-720215. Under the prior definition, consumable equipment costs less than $500 and is recorded in accounts 620017-620057. As renewals on these agreements take place, the indirect cost rate for the renewal accounts will change to 50%, and the new accounts will be subject to the new expenditure capitalization values.