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Capital and Operating Lease

Can I surplus leased equipment?

No, leased equipment is technically not University property - we are only tracking it for the company we are leasing it from.

Who should I contact if I have questions about setting up a lease for equipment?

Please contact Equipment Inventory at 206-543-4663 with general questions related to leases or Financial Reporting at 206-221-7845 to determine if the lease should be classified as capital or operating.

How do I determine if a lease is capital or operating?

The University automatically classifies leases as operating where the cost of documentation, accounting and disclosure, and audit support, significantly exceeds the benefit to University stakeholders. To be considered a capital lease at the University, the total value of future minimum lease payments or fair value (whichever is less) must be significant to the University and require recognition as a long-term debt in the University's annual audited financial report (as determined by Financial Reporting) and must meet one or more of the following criteria:

  • Lease term is greater than 75% of the equipment's estimated economic life;
  • Lease contains an option to purchase the equipment for less than fair market value;
  • Ownership of the equipment is transferred to the university at the end of the lease term; or
  • Present value of the lease payments exceeds 90% of the fair market value of the equipment.

Fabrication

The policy does not allow for fabricated items that are to be delivered to an external entity or that are not University owned. How should I treat those?

If a fabricated item is to be delivered to an external entity or is not University owned, the equipment is not subject to being tagged or inventoried. Salaries, supplies, and other costs incurred in fabrications should be left in their original expenditure object code, not transferred to the 06-XX object code by JV. 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 should be coded 06

What should I do if we purchase a piece of equipment for a fabrication as 06-XX instead of 05-40?

The easiest way to handle this is to add cost the 06-XX asset to the fabrication and not include it in the fabrication Journal Voucher (JV) request.

Can a fabrication be broken apart?

No. A fabrication is defined as one piece of equipment that is built (fabricated) because an existing piece of equipment with the desired functionality does not exist. The fabricated item should remain together for the lifetime of the asset. The entire cost of the fabricated asset is depreciated over its useful life and the costs incurred to build the asset are excluded from indirect cost.

All Requests to Transfer Expenditures (RTE) submitted on paper Journal Voucher (JV) must be processed through the Financial Desktop Transactions application. Is the Fabrication JV request an exception to this?

Fabrication JVs are an exception to this, though we hope to be able to process these through the Financial Desktop eventually. Currently, the Transactions application only allows for the transfer of existing expenditures. Fabrication JVs don't move existing expenditures, they create a second set of expenditure debits (05-XX, 01-XX, 03-XX, etc) and a 21-XX credit. Please see 'Note' under the Department's portion of the Procedure section of the Equipment Fabrication web page.

Fellowship

How do I know if the Fellowship allows equipment?

It should be explicitly stated in the copy of the Fellowship.  Please verify what is allowed before making any purchases. 

Why did Equipment Inventory reject my requisition for an 80-XXXX budget purchase and what can I do to fix it?

Any time a department orders equipment on a Fellowship (80-XXXX) budget, Equipment Inventory is required to see if the equipment is intended to stay at the UW permanently or if it is intended to be the fellow's personal property.  If the equipment is to become the fellow's personal property, please provide supporting documentation (award documentation or an email from the sponsor) stating the equipment may become the personal property of the Fellow and code the equipment as 05-40 Non-inventorial Equipment regardless of cost. If the equipment is to stay at the University, please state "Item will stay with the UW" in the comments and code as the appropriate 05-4X or 06-XX object code. 

What do I do if my department accidentally purchases something that the fellow is going to keep?

Immediately contact Equipjment Inventory at 543-4663 and we'll see what we can do to help you correct the error.

Can a department use the ProCard to purchase equipment on an 80-XXXX budget?

Yes, but they have to note that the item will remain UW property.  As a part of the ProCard approval process, EIO will check to make sure the student doesn't plan on keeping the item and will let them know to enter a note on the transaction that "This item will remain UW property.

Surplus Property

An item has shown up in my department with a different department's inventory tag and I think we bought it from Surplus. What should I do?

Call Equipment Inventory at 543-4663. We can look the item up for you. This will provide us with its history and help us figure out how to move forward. If the item is accidentally in your area and was not a purchase from Surplus, we can contact the department of ownership to arrange for its return.

What do I do if I have an inventorial Surplus purchase and I don't use OASIS?

Enter the information into our UW Equipment Information Card (Web Form). When you submit this web form, the information is sent directly to Equipment Inventory and we will enter it into OASIS for you.

My department wants to consider buying some Surplus equipment. Where do I start?

Start by visiting Surplus Property's Purchasing and Sales website. Here you will find information on public auction dates, store hours, contact information, and parking. There's also an option to sign up for their mailing list, if interested.

Transfer In

What do I do if I have an inventorial transfer in and I don't use OASIS?

Enter the information into our UW Equipment Information Card (Web Form). When you submit this web form, the information is sent directly to Equipment Inventory and we will enter it into OASIS for you.

How do I determine fair market value?

The original institution should have that information available for you in the transfer paperwork. If the original equipment cost is not included, contact Surplus for assistance.

Acquisitions

EIO keeps nagging at me to clear a pending asset but I haven't received the item yet. What should I do?

In limited circumstances, payment may occur before an asset has been received.  This will automatically result in a pending asset for your department.  When notified of this pending asset, simply add a comment to the Other Location field of OASIS stating "Item has not been recevied."  EIO will continue to follow up with you on this pending asset during the monthly pending push but will not consider it a high priority until the item has been received.   

What does Federal or Agency titled mean?

If a piece of equipment is Federal or Agency titled, it is owned by the Federal Government or the sponsoring Agency. It is not titled/owned by the University and has special restrictions. The title/ownership of equipment is usually spelled out in the award documentation.

We received some equipment as a gift. How should I handle it?

If the equipment has a current fair market value of $5,000 or more and a life expectancy of at least one year, enter the equipment information into the OASIS system:
Status 'T'
Requisition number '000000'
Acquisition method 'GF'
You will also need to complete a Gift Transmittal Form and submit it to Gift Processing, Box 359505. This will ensure proper reporting.

Can I purchase equipment for the Fellow to keep on a Fellowship (80 series) budget using eProcurement, ProCard, or a check request?

Yes.  Equipment for the fellow to keep may be purchased on a fellowship budget using any one of the University's purchasing methods, as long as supporting documentation is provided (award documentation or an email from the sponsor) stating the equipment may become the personal property of the Fellow.  Please code these equipment items as 05-40 Non-inventorial Equipment.

I'm purchasing a computer. Do I have to purchase each piece separately?

Computer components purchased on the same requisition can be purchased as a system and coded as equipment according to total cost (CPU, monitor, mouse, key board, etc.)

Who determines if an item is titled to the UW or to the sponsor?

Equipment associated with a grant or contract can be designated as University owned equipment, or agency owned equipment. The ownership of equipment is usually spelled out in the documentation that accompanies a negotiated grant or contract. OSP (Office of Sponsored Programs) negotiates and processes award documents. OSP will determine the appropriate ownership of equipment associated with a particular grant or contract. For questions regarding the determination of equipment ownership, OSP can be reached at: osp@u.washington.edu, or 206.543.4043

Is modular equipment inventorial?

Rarely. Only the individual pieces that are $5,000 or more are inventorial.

I've heard that all equipment purchased on grants and contracts is exempt from Indirect Cost. Is that true?

It depends on the budget. Please look at the indirect cost section of your budget profile in MyFD to find the 'Indirect Cost Actual Base' (it is the 3rd item under Indirect Cost). If you click on the title 'Indirect Cost Actual Base', it will take you to a glossary where it lists the possible codes and the descriptions. If your code does not specifically exclude equipment, then it is not exempt.

Is it okay to purchase software and accessories for an employee's personal computer that is used for work?

Yes, however, it is important to emphasize that they'll need to return the items upon their departure from the University.

Our department is receiving a piece of equipment to demo before deciding if we want to purchase it. What do I need to do with it?

It depends if any money has exchanged hands.  If not (i.e. the UW is not paying anything for shipping or any sort of down payment), then nothing is necessary until a purchase requisition has been created and the items has been paid for.  There is no contractual agreement at this point.  If any sort of payment has been made related to the demo (before deciding to purchase), please contact Equipment Inventory for additional guidance.  Please note, if your department decides to purchase the item, it is important to make sure you have the appropriate receiving documentation to support receipt of the equipment.

What is the threshold for: a) Equipment, b) Machinery & Equipment (M&E) purchases, and c) Procurement Card Equipment Purchases?

a. Tangible assets acquired through donation, gift, purchase, loan, capital lease, or self-construction, with a life expectancy of more than one year and a total acquisition cost of $5,000 or more (total purchase price including shipping, handling, tax, etc.) should be assigned an appropriate University equipment identification tag and inventoried.
b. Equipment purchased for certain University research and development activities may qualify for a sales tax exemption allowed under RCW 82.08.02565, (Revised Code of Washington - compilation of Washington State laws in force) known as the Machinery and Equipment Tax Exemption, or M&E Exemption. Purchases must have an acquisition cost of $200 or more to be considered, along with other criteria, for an M&E exemption. Please see the University's Machinery and Equipment (M&E) Sales Tax Exemption for additional information
c. A ProCard purchase is an order placed where the payment mechanism is the University's official ProCurement Card. Purchases made via ProCard must have an acquisition cost of no more than $3,500 (total purchase price including shipping, handling, tax, etc.). At times it might be necessary to request a single transaction limit increase in order to make a ProCard purchase over $3,500. Instructions on how to request an increase can be found here.

What object code should I use to order equipment?

Object/sub-object codes are used in expenditure classifications. The term applies to the type of the article purchased or the service obtained. See Equipment Acquisitions for object codes used to purchase equipment. For more detailed descriptions of these codes, please click on the individual code or visit Object Codes for Expenditures.

What is Value Added Tax? Do we need to pay it?

Check award documentation to see if VAT is or is not allowable:

For any awards from NIH or other DHHS agencies (CDC, HRSA, etc.), the VAT would not be allowed because the foreign component of those awards is significant.  VAT would need to be paid from non-sponsored funds.  See sample NIH language below:

  • Customs and Import Duties:  Allowable under grants to domestic organizations when performance will take place entirely within the United States, its possessions, or its territories, or when foreign involvement in the project is incidental to the overall grant-supported project.  Charges may include consular fees, customs surtaxes, value-added taxes, and other related charges.  Consular fees, customs surtaxes, value-added taxes, and other related charges are unallowable on foreign grants or the foreign component of a domestic grant.

The power point presentation may be found here.

Gift

Where do I get a Gift Transmittal Form?

Please see the 'Gift Transmittals' page for the Gift Transmittal Form. Contact the University Advancement's Gift Processing unit with questions relating to the form.

How do I determine fair market value?

You have three options in determining fair market value (FMV) on gift equipment:
1. The donor should have that information available for you;
2. If they don't, you can go to the manufacturer's web site and look at the manufacturer's suggested retail price for the item;
3. If these first two do not work for you, contact Surplus for more assistance on determining a fair market value.

What do I do if I have an inventorial gift and I don't use OASIS?

Enter the information into our UW Equipment Information Card (Web Form). When you submit this web form, the information is sent directly to Equipment Inventory and we will enter it into OASIS for you.