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Capital Equipment

University Capital Equipment

Capital equipment for the University must have an individual cost of $5,000 or more and have a useful life of one or more years, provided sufficient individuality and size exists to make control feasible.

Hospital Capital Equipment

Capital equipment for the Hospital must have an individual cost of $2,000 or more and have a useful life of one or more years, provided sufficient individuality and size exists to make control feasible. Major computer software is capitalized when its cost is $5,000 or greater.

All Capital Equipment

Hospital and University equipment is accounted for separately. Therefore, the cost of a capital equipment item cannot be split between Hospital and non-Hospital account numbers.

Expenditures for capital equipment or major computer software must be charged to the proper sub-codes 8908051-8908059 in the Oracle Accounting System.

For an accessory or component to be included in the original acquisition cost of a piece of equipment, it should be an attached or installed option, which as assembled is expected to operate as a single unit for the remainder of its life. Some examples of such equipment are given below, but this is not an exhaustive list:

  • PC computer systems – PC computer systems are capitalized as a single unit, but will have one or more property numbers depending on how they are priced. If the system is ordered together on the same purchase order, all components of the system will be assigned one asset ID number and treated as a single asset. If individual components external to the CPU case meet or exceed the capitalization threshold ($5,000 for the University, $2,000 for the Hospital), these items will be tagged separately.
  • Centrifuges – The rotor and centrifuge are often capitalized as a single unit and thus assigned a single asset ID number. However, if each component meets or exceeds the capitalization threshold separately, the two parts will be assigned individual asset ID numbers. Accessories such as buckets and adapters that are part of the original purchase of the centrifuge are included in the cost.
  • Incubators – The incubator, CO2 valves, racks, platforms, and temperature control are identified as one item.
  • Microscopes – The entire microscope and all of its original components are identified as one item.

Capital Upgrades to Equipment

A capital upgrade occurs when an equipment item is acquired that will become an integral component of another piece of capital equipment currently owned by UAB. The newly acquired item must meet standard University or Hospital Equipment Capitalization Criteria.

The cost of the upgrade is charged to the equipment sub code and added to the original equipment item's total cost.

  • Only UAB-owned equipment can be upgraded with items purchased by UAB.
  • All upgrades to Hospital owned equipment must be paid from hospital accounts.

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