- The definition of capital equipment is an item having an acquisition or donated value of $5,000 or more and a useful life in excess of one year.
- These items are not subject to Facility and Administrative (F&A) costs when the negotiated F&A rate schedule is used or when F&A is not an allowable cost by the awarding agency.
- Equipment that is constructed by combining or assembling modular components and/or
materials into one identifiable unit is referred to as fabricated equipment.
- When completed, each component loses its individual identity and the end product
becomes an identifiable single unit. Typically such equipment is made or designed
in-house for a specific purpose.
- In order to be capitalized, the finished product must have a unit cost of $5,000 or more and a life expectancy of more than one year.
Items to take into consideration with fabricated equipment
- University labor costs related to equipment fabrication by an approved recharge center qualify for inclusion in the capitalized cost.
- All other University labor
costs are not allowed to be capitalized as part of the fabricated project.
purchase price on individual components does not have to exceed $5,000, as long
as the total combined price of the end product is equal to or greater than $5,000.
- If a fabricated project is approved, then the individual items must be purchased using a fabricated equipment account in the 54 line item series.
- Repair of existing equipment, regardless of the cost, is not fabricated and is subject to F&A costs.
- If there is an upgrade of existing equipment, which results in the existing equipment implementing new technologies (not just an upgrade or repair of existing technology) and the total of the components of the upgrade are greater than $5,000, then the purchase of the components are not subject to F&A costs.
- Is equipment acquired by a contractor for performance of a contract, to which the government holds title unless stated otherwise in the terms and conditions of the contract.
- Is equipment owned by the federal government or acquired by the university with federal funds under the terms of a contract or grant for which the federal government retains title.
- Is equipment provided to the university by the federal government or government
contractor and title may or may not remain with the federal government.
- Government-furnished property remains owned by and titled to the federal government
while in WVU’s possession and until it is properly disposed of.
- Any property received from the federal government regardless of original value
or date when received must be properly and continuously identified, maintained,
protected, controlled, and inventoried while in the possession of WVU or its
- Government-furnished property must be disposed of when no longer needed as approved
by the federal agency that furnished the equipment.
- Disposal may involve returning the property to the government, transferring its
title of ownership to WVU, or distributing to a third party.
- See WVU Capitalization Policy for more detail