4209 PR.01 Fabricated Moveable Equipment
This procedure relates to Policy 4209 Equipment, and specifically describes the capitalization of fabricated equipment.
Fabricated equipment represents the costs incurred to fabricate non-expendable, tangible personal property by building or assembling various components and or materials into one identifiable unit. Such costs are accounted for as equipment in process until the item is completed and placed in service, at which time it is added to the University’s Moveable Equipment Inventory. Fabrications associated with sponsor-funded research and development are not considered true assets of the University and, therefore, will not be capitalized. Moreover, Fabricated equipment delivered to third parties without being placed in service at the University may not be capitalized.
Departments fabricating equipment should follow the below procedures to ensure the proper accounting, tracking, and safeguarding of such equipment in accordance with Policy 4209 Equipment:
- Before purchasing any components to be used in the fabrication of an asset, departments request a new Workday operating project using the Workday COA Project Forms, to which all fabrication costs will be charged using the Workday Fabricated Equipment spend category;
- An estimated completion date must be provided on the Workday operating project set-up form;
- As with all operating projects, charges will be permitted up to the project close date; and
- Once placed in service and added to the MEI System, an MEI tag will be delivered to the department for physical placement on the asset and depreciation of the asset will commence.
It is the responsibility of the department fabricating such equipment to supply the Controller’s Office with any needed information relative to the asset being constructed.
Controller’s Office Responsibility
The Controller’s Office will perform the following procedures to ensure the proper identification, tracking, and accounting for fabricated equipment being constructed in accordance with Policy 4209 Equipment:
- The Controller’s Office reviews all requests submitted to the Chart of Accounts Group for new Workday Projects for the accumulation of fabricated equipment costs. Only requests that meet the criteria for capitalization will be approved;
- The MEI Manager adds the asset to the MEI System and issues an MEI tag to the department for physical placement on the asset, and depreciation will commence;
- The Controller’s Office closes the Workday Project and no further costs will be allowed to be charged to it;
- If at the time of completion Project costs do not meet the capitalization threshold of $5,000, all costs are transferred by the Controller’s Office to an expendable spend category and will not be capitalized.