University Depreciation - The University has a $5,000 capitalization threshold and therefore depreciates all equipment over $5,000. The University’s fixed asset system, OASIS, calculates these “official” depreciation amounts which are used in the University’s financial statements, State reporting, and the F&A process. These depreciation figures are recorded at a high level on an annual basis and are not posted to the individual departmental budgets.
Recharge/Cost Center Deprecation - Recharge Centers have a $5,000 threshold for cost center depreciation purposes only. This depreciation is used for internal calculations for cost recovery and compliance. Equipment purchases for recharge centers also follow the University’s standard equipment object coding (i.e. if the item is $5,000 or more, it needs to be coded as the proper 06-XX object code). See below:
- Equipment $5,000 or more: Recharge centers are not allowed to recover the full cost of capital equipment costing $5,000 or more within one fiscal year. As a result, all capital assets purchased in a recharge center that cost $5,000 or more cannot be purchased on the recharge center’s operating budget. These purchases are most commonly purchased on the equipment reserve budget. Cost centers recover this cost through the cost recovery method of “cost center depreciation” account code 15-01. This account code is only used for internal purposes.
- Equipment less than $5,000: All capital equipment costing less than $5,000 can be fully expensed during the year they are purchased, as it relates to recharge center costing only. In order to recover this expense in the cost center rates, the items must be purchased on the operating budget. The UW classification and rules relating to equipment still apply.