THE UW HAS IMPLEMENTED A NEW EQUIPMENT CAPITALIZATION THRESHOLD
After extensive consultation with our campus partners, UW’s Office of Research and UW Finance & Facilities have made the decision to increase the University’s existing equipment threshold. Effective July 1st, 2016, the new threshold increased from $2,000 to $5,000.
- Anticipated Impact
- Sponsored Projects
- Non-Sponsored Budgets
- Frequently Asked Questions
- Contact Information
Effective July 1, 2016, the University of Washington’s equipment capitalization threshold increased from $2,000 to $5,000. This change applies to both purchased and fabricated equipment and to furniture. In order to minimize the impact on the research community, the threshold increase will be implemented in phases.
The driving force behind this change is a significant reduction in both faculty and staff administrative burden at all three campuses. Over 40,000 items, representing 65% of UW’s total inventory, will no longer require physical inventory. The time and effort currently spent tracking these lower value assets is significant. Additionally, this will align the UW’s capitalization threshold with Federal and State thresholds of $5,000 and this should also help reduce confusion when dealing with sponsors. This change will allow UW faculty and staff more time to focus on the important teaching, research and public service for which the UW is recognized around the world, and put us in alignment with all of our peers. Due to the fact that facilities and administrative costs will now be assessed on equipment in the $2,000-$5,000 range, the total costs for such equipment purchased on grants will increase. However, it was our assessment as well as that of our campus advisors that overall the cost savings from implementing this change outweigh the disadvantages.
Existing Awards and Proposals approved prior to May 1, 2016:
The $2,000 threshold will continue to apply to existing funding. The $2,000 threshold will also continue to apply to non-competing renewals. In addition, funding received in response to proposals with an EGC-1 approval date prior to May 1, 2016 will continue to have the $2,000 threshold apply, even if the award has a start date of 7/1/2016 or later, to accommodate the use of the lower threshold in budgeting.
Proposals for New, Competing Renewals & Supplements approved on or after May 1, 2016:
Proposals for new, competing renewal, and supplemental funding with an EGC-1 approval date on or after May 1, 2016 will be subject to the new $5,000 threshold. Budgets submitted with these proposals must categorize items with an acquisition cost of $5,000 or more and a useful life exceeding one year as equipment. Indirect cost (F&A) must be calculated on all non-capital equipment/supplies with an acquisition cost under $5,000.
Purchase Orders fully executed prior to July 1, 2016:
The purchase order date will determine which threshold will apply. The $2,000 threshold will apply in cases where a purchase order has been fully executed (EI or BPO number issued) prior to July 1, 2016, with the equipment object code “06” regardless of when the equipment is paid for and/or received. Purchase orders executed on or after July 1, 2016 will be subject to the new $5,000 threshold.
As we approach July, we will provide additional details on the implementation process and FAQ’s. We would like to thank all of our campus partners (Faculty Council on Research, the Research Advisory Board, Associate Deans for Research and Post-Award Administrative Advisory Group) who participated in the decision making process. If you have questions, please feel free to reach out to either of us. Thank you.
Mary Lidstrom Sue Camber
Vice Provost for Research Associate Vice President for Research & Student Accounting
Office of Research Finance & Facilities
Frequently Asked Questions (FAQs)
Equipment Inventory Office (EIO)
For questions related to equipment management, Oasis changes, physical inventory, depreciation and purchase of new equipment
4300 Roosevelt Way NE, Suite 300 (Office Hours: 8am - 5pm)
Seattle, WA 98105
Phone: (206) 543-4663
Office of Sponsored Programs (OSP)
For questions related to proposals, awards, sponsors, applications and proposals
Grant and Contract Accounting (GCA)
For questions related to application of F&A rates
Management Accounting and Analysis (MAA)
For questions related to F&A rate, direct and indirect cost
For questions related to purchasing and Ariba
Office of Research Information Services (ORIS)
For questions related to Sage