4209 PR.04 Moveable Equipment Accessories and Composite Assets

Contents

1.      Overview

2.      Definitions

3.      Capitalization of Equipment

4.      Accessories Costing Less than $5,000

5.      Composite Assets

This procedure describes the process for capitalizing Composite Assets and Accessories as part of the University’s Moveable Equipment Inventory.  This procedure is related to the University’s Policy 4209 Equipment.

Accessories – For University purposes, accessories are minor (less than $5,000) equipment items purchased as attachments or add-on’s for a capital equipment item and are necessary for the equipment to be placed in service for its intended purpose.

Composite Asset – For University purposes, a composite asset is composed of individual pieces of minor equipment that when combined form one asset and have a combined purchase price equal to or greater than $5,000.  All composite pieces must be needed to make the asset functional for its intended purpose. Any of the individual pieces of equipment may have a purchase price of less than $5,000 but the total cost of all the components must equal or exceed $5,000.

Equipment is a tangible, non-expendable University asset that has an estimated useful life of greater than one year and a per unit acquisition cost equal to or greater than the University’s capitalization threshold of $5,000.  The University’s Moveable Equipment Inventory (MEI) System automatically capitalizes all purchases of equipment with a dollar amount of $5,000 or more that are charged to any of the University’s thirteen MEI spend categories, which are:

            SC022              Equipment – Animal Caging

            SC023              Equipment – Cleaning & Maintenance

            SC025              Equipment – Computer

            SC028              Equipment – Electrical & Power

            SC031              Equipment – Food Preparation and Serving

            SC032              Equipment – Furniture

            SC034              Equipment – Laboratory Instruments

            SC047              Equipment – Musical Instruments

            SC048              Equipment – Office & Photographic

            SC051              Equipment – Recreational and Athletic

            SC052              Equipment – Refrigeration, Air Conditioning, Air

            SC053              Equipment – Shop

            SC058              Equipment - Vehicles

Transactions with unit costs less than the capitalization threshold of $5,000 may not use the above spend categories.  For purchases with unit costs less than $5,000, please use an appropriate materials and supplies spend category within Yale’s e-procurement solution.

Note: If the purchase of capital equipment is distributed across multiple invoices (e.g., initial deposit, installment payments), the purchaser (or purchaser’s business office) is responsible for contacting the Controller’s Office Capital Asset Accounting team via email at mei.admin@yale.edu to inform them of the purchase.  The purchaser (or purchaser’s business office) is responsible for sending two emails: one at the time of initial purchase and one at the time of final invoice payment.  This procedure helps ensure the proper creation of a single asset in the system.

Departments that purchase MEI accessories costing less than $5,000 will be allowed to capitalize them and have them added to the MEI System, only if both of the following criteria are met:

1. The accessories are purchased at the same time as the original piece of MEI; and
2. The accessories are required in order to place the related MEI asset in service for its intended purpose.

Departments that want to capitalize an accessory costing less than $5,000 must complete the following steps:

1. Complete a MEI Accessories and Composite Form (4209 FR.04) identifying the accessories and the purchase prices of each; and
2. Submit the completed form to the MEI Manager at mei.admin@yale.edu along with copies of the vendor invoices and purchase orders.  The asset identifier (tag number) of the MEI asset to which it relates must be provided.

The MEI Manager will review the request and will notify the requesting department whether or not the request meets the requirements for capitalization.  The Controller’s Office alone has authority to approve and disallow such requests.

If approved, the MEI Manager will capitalize the purchases in the capital assets system.

Departments that purchase MEI components with individual purchase prices less than $5,000 will be allowed to capitalize the costs of the composite asset and have it added to the MEI System, only if all of the following criteria are met:

1. The combined cost to purchase the components equals or exceeds $5,000;
2. The useful life of the composite asset exceeds one year; and
3. All component parts are purchased at the same time.

Departments that want to capitalize individual components as a composite asset must complete the following steps:

1. Complete a MEI Accessories and Composite Form (4209 FR.04) identifying the component parts and the purchase prices of each; and 
2. Submit the completed form to the MEI Manager at mei.admin@yale.edu along with copies of the vendor invoices, purchase orders and the location of the asset.

The MEI Manager will review the request and will notify the requesting department whether or not the request meets the requirements for capitalization.  The Controller’s Office alone has authority to approve and disallow such requests.

If approved, the MEI Manager will capitalize the purchases in the capital assets system.

*If a department is entering into a capital lease, where title to the leased equipment is retained by the University at the end of the lease term, or if an equipment purchase involves multiple payments by installments, the department should work with procurement, prior to purchase, to avoid the issuance of multiple property tags to a single asset.*