University of Washington Policy Directory

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*Formerly part of the University Handbook
Administrative Policy Statement
61.2



Equipment Definitions and Purchase Codes

(Approved by the Executive Vice President by authority of Executive Order No. 5)



1.  Definitions of Equipment

Tangible assets acquired through donation, gift, purchase, loan, capital lease, or self-construction, with a life expectancy of more than one year and a cost of $2,000 or more. Cost is defined as unit price including calibration, installation, freight, trade-in, and sales and excise tax. For a definition of construction capitalization see Administrative Policy Statement 61.8.

a.   Sensitive Items

All weapons and firearms are considered "sensitive" and must be tagged and inventoried regardless of cost (code items under $2,000 with Object Code 05–10; items $2,000 to $4,999 with Object Code 06–90; and items $5,000 and more with Object Code 06–91). Weapons may include, but are not limited to, signal guns, line-throwing equipment, and animal control devices.

b.   Gifts

Gifts are considered equipment if they meet the equipment definition. University departments must approximate the fair market value of gift items at the time of receipt, and those items having an estimated fair market value of $2,000 or more, with a life expectancy of more than one year, must be tagged and inventoried. The department is to complete a Gift/Pledge Transmittal form and forward it to the Gift Processing and Records Management Office, Box 358240. The asset must also be reported to the Equipment Inventory Office in the same manner as a newly-received purchased asset.

c.   Transferred Items

Transferred items are those items brought into the University or department from other universities, agencies, or University departments. Transferred items are treated as equipment if they meet the equipment definition. University departments must approximate the fair market value of transferred items at the time of receipt, and those items having an estimated fair market value of $2,000 or more, with a life expectancy of more than one year, must be tagged and inventoried.

d.   Personal Computer (PC) Policy

Integral personal computer components, once assembled with a central processing unit (CPU) or hard drive that meet the definition of equipment, should be tagged and inventoried as a single equipment item. If possible, personal computers should be purchased from a single purchase requisition. The cost of the PC components must not include maintenance agreements, consumable supplies, or manuals. PCs (and attached peripherals) should be restricted to a single location. For example, an individual personal computer workstation consisting of the CPU, operating system, monitor, keyboard, mouse, desk printer, external modem, and external drive would be one item of equipment, with the property tag affixed to the CPU. However, networked personal computers or terminals cannot be bundled and tagged as one equipment item. Each workstation CPU or hard drive should be separately tagged (provided it meets the equipment definition requirements).

e.   Fabricated Items

Fabricated or constructed items are treated as equipment provided they meet the equipment definition. Fabrications are not considered equipment if they are part of a deliverable award or the initial ownership is non-University (see Section 2.g for more details).

f.   Replacements Parts or Supplies

Replacement parts or supplies consumed in the performance of work are considered supplies, not equipment, and should be coded as 05–99 when ordered, regardless of cost.

g.   "NOTAG" Items

"NOTAG" equipment items are those which meet the definition of equipment but are too small or impractical to affix with an equipment identification tag. These items should be inventoried and a barcode inventory number assigned. If feasible, the tag number should be inscribed on the item or written on the item using indelible ink.

h.   Noninventorial Items

Certain items which vary in size, usage, cost, or life expectancy, such as diamond knives, miscellaneous surgical items, electrophoresis units, pressure sensors, columns, and transducers, should not be considered equipment (see Section 2.b).

2.  Coding Equipment for Purchase

Careful recording of expenditure codes on purchase requisitions will ensure that equipment is properly recorded in the Financial Accounting System (FAS), correctly added to the using department's inventory, and assigned an appropriate University or agency equipment identification tag in compliance with state and federal law. Departmental personnel responsible for preparing purchase requisitions should be familiar with the definition of equipment and the equipment expenditure object and sub-object codes. Improperly coded online purchase requisitions will be returned to the department for correction, resulting in delayed purchasing and delivery schedules, which may impact research, agency budgets, and indirect costs.

a.   Coding of Noncapital Items (Noninventorial)

Noncapital item coding is described as follows:

05–XX Series:

  05–01 Food, groceries, (not restaurant or catering).
  05–02 Kitchen supplies.
  05–10 Sensitive inventorial items (weapons and firearms) which cost less than $2,000 (see Administrative Policy Statement 61.4, Section 4).
  05–30 Books, pamphlets, prerecorded tapes, and discs (non-library).
  05–40 Noninventorial items (see Section 2.b). These items should not be tagged or inventoried.
  05–45 Computer software which costs less than $2,000.
  05–98 Resale (equipment) purchases (auxiliary enterprises only).
  05–99 Miscellaneous (cable, supplies, replacement parts, etc.).

b.   Noninventorial Items

Items not subject to being tagged or inventoried costing $2,000 or more should be coded 05–40. Examples follow:

  • Air conditioning units (fixed)
  • Blinds
  • Capital projects—
        remodeling fixed building
        items
  • Carpets
  • Current meters
  • Diamond knives
  • Drapes
  • Electrodes
  • Fishing nets, trawls
  • Flowmeter heads
  • Glass/plastic products
  • Hot water units
  • Marine wet/dry suits
  • Medical items inserted into
        a body
  • Rubber products
  • Seismographs (buried)
  • Shelving/room panels
  • Shipboard "overside" items
  • Surgical items (miscellaneous)
  • Tubes, electron
  • c.   Coding of Equipment

    Capitalized equipment costing $2,000 or more should be tagged and inventoried. These items should be object-coded (06–XX) in accordance with the list provided below. Items properly coded as 06–96 are not inventorial. Following is a list of codes for 06–XX expenditures:

    06–XX Series:

    06–10 Computing equipment, including software, costing $2,000 or more, but less than $5,000.
    06–11 Computing equipment, including software, costing $5,000 or more.
    06–90 Noncomputer equipment costing $2,000 or more, but less than $5,000.
    06–91 Noncomputer equipment costing $5,000 or more.
    06–96 Equipment passed through to an external agency without the University's intervening use.

    d.   Personal Computer (PC) Policy

    Integral personal computer components, once assembled with a central processing unit (CPU) or hard drive that meet the definition of equipment, should be tagged and inventoried as a single equipment item. If possible, personal computers should be purchased from a single purchase requisition. The cost of the PC components must not include maintenance agreements, consumable supplies, or manuals. PCs (and attached peripherals) should be restricted to a single location. For example, an individual personal computer workstation consisting of the CPU, operating system, monitor, keyboard, mouse, desk printer, external modem, and external drive would be one item of equipment, with the property tag affixed to the CPU. However, networked personal computers or terminals cannot be bundled and tagged as one equipment item. Each workstation CPU or hard drive should be separately tagged (provided it meets the equipment definition requirements).

    The computer base unit and integral computer components appearing on separate lines of the purchase requisition should be totaled (including tax) and compared with the object code list. Each item on the purchase requisition which forms the computer should use the same valid object code (e.g., a computer workstation appearing on individual lines would have each line coded as 06–10 if the total value of the computer workstation was $2,000 or more, but less than $5,000). Maintenance agreements should be coded 03–64, consumable supplies (e.g., toner, paper, diskettes) and manuals should be coded 05–99 on purchase requisitions. If multiple computers are purchased on one purchase requisition and are not easily identifiable as distinct workstations, a note indicating which purchase requisition lines pertain to each workstation should appear in the purchase requisition's "Comment Screen."

    If multiple purchase requisitions have been used to form a computer workstation, a Journal Voucher (JV) form may be requested to accumulate all 05–40 expenditures in the appropriate 06–XX object code. Secondary requisitions will not be allowed to use an 06–XX object code unless the acquisition meets the definition of equipment on its own merits (i.e., on a new federal award with the base unit acquired on a separate purchase requisition, a component will only be allowed to use an 06–XX object code if this item costs $2,000 or more). A computer component costing less than $2,000 and listed on a separate purchase requisition should be coded 05–40.

    e.   Grant and Contract Funds

    Grant and contract acquisitions should be assigned an expenditure code based upon the University/state definitions for supplies and equipment as described herein. Sponsor requirements regarding allowability of equipment purchases by grant and contract budgets are dependent upon individual sponsor regulations and/or type of award. The award document, sponsor regulations contain information regarding budget restrictions, prior approval requirements, and rebudgeting.

    f.   Fabricated Items

    1) Fabricated Items for University Research or Internal Use—Parts which will be used to construct fabricated items (but not to assemble computer workstations, as discussed in Section 2.e) that will meet the definition of equipment when completed should use Object Code 05–99 initially on the purchase requisition (see Section 1 for the definition of equipment). (Enter "FAB" to the right side of line 1 of the purchase requisition to indicate an item purchased for a fabrication.) When construction of the equipment is completed, the accumulated non-06 expenditures for the design, salaries, supplies, materials, and individual components must be transferred to Object Code 06 using a JV.

    Whenever a fabrication involves grant and contract funds, a JV request should be sent first to the Grant and Contract Accounting Office, Box 351122. If construction lasts a year or more, the JV should be completed at least once a year, at year's end.

    All JVs must reference the appropriate barcode inventory number(s). (Note: A complete matching of all 05–10 and/or 06–XX expenditures with the appropriate equipment tag numbers is necessary for JVs with multiple assets.) Asset information must be entered on the Asset Entry/Inquiry Screen in Web OASIS or submitted via Equipment Information Card(s). Indirect costs are automatically adjusted when each fabrication JV is processed.

    2) Fabricated Items for Delivery to an External Entity or Non-University-Owned Items—Fabrications or equipment items purchased for direct resale to an external customer or for delivery to a sponsoring agency without intervening use by the University should not be tagged or inventoried. Additionally, if a fabricated item is initially owned by a non-University or external entity, the equipment is not subject to being tagged or inventoried. Salaries, supplies, and other costs incurred in fabrications are to be left in their original expenditure object code, not transferred to Object Code 06. These costs will incur the usual indirect costs for grants and contracts. Individual parts or equipment items that fall into this category and meet the standard definition of equipment (see Section 1 for the definition of equipment) should be coded 06–96 on purchase requisitions.

    g.   Capital Lease

    A capital lease of equipment transfers all benefits and risks inherent in ownership to the University. A capital lease with a value of $10,000 or more is accounted for as an acquisition of an asset and the incurring of a liability. Lease payments are coded 09–04 for the principal on noncomputer capital leases, and 09–05 for the principal on computer capital leases. The Financial Accounting Office will prepare a JV at the end of the fiscal year to recode the interest expense and forward a copy of the processed JV(s) to the Equipment Inventory Office.

    h.   Operational Leases and Rentals

    Capital leases with a value of less than $10,000 are treated as operating leases. These transactions should be coded 03–XX within the sub-object code range 03–80 to 03–89.

    3.  Additional Information

    For further information contact the Equipment Inventory Office:

    December 1999.