This change will not affect the University’s capital construction threshold, but may affect the overall construction project budget. After the change, equipment purchases between $2,000 and $4,999 that were previously budgeted as capital purchases, will become operating expenditures.
Equipment purchases from $2000 to $4,999 will now be included as operating expenses rather than depreciable assets.
Effective 7/1/2016 the UW will no longer be required to inventory items with a previously acquired value under $5,000 that are still depreciating.
For non-sponsored budgets, the requisition must be fully executed (BPO or EI number assigned) before June 30, 2016 for the $2,000 threshold to apply. All fully executed purchase orders (BPO or EI number assigned) after July 1, 2016 would use the new $5,000 threshold.
Beginning 7/1/2016, two new object codes “05-47 non-capitalized equipment ($2,000 - $4,999) – grandfathered awards” and “05-48 non-capitalized equipment M&E tax exempt ($2,000 - $4,999) – grandfathered awards” will be available for equipment purchases of $2,000 - $4,999 for grandfathered award budgets. These new object codes will replace the existing “06” object codes for specific equipment purchases with a cost of $2,000 - $4,999. (See the grandfathered award object code chart below)
Beginning 7/1/2016, object codes “05-40 non-capitalized equipment (less than $5,000)” and “05-41 non-capitalized equipment - M&E tax exempt ($200 - $4,999)” will replace the existing “06” object codes for specific equipment purchases with a cost of $2,000 - $4,999. (See the non-sponsored budgets and non-grandfathered award object code chart below)
For Non-Sponsored and State Budgets
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. We will continue to depreciate these items until they are fully depreciated or disposed of (asset retirement), then remove them from the inventory system.