Any piece of capital equipment which has ceased to function with respect to its regular operation and which is highly unlikely to be used in its present form in the future, must be disposed of and removed from the inventory records. Disposal of capital equipment must comply with Department of Administration, State Procurement Manual chapters PRO-F-1 & 3.

Information regarding capital equipment items which have been removed from the inventory records should be maintained for one subsequent year. Ultimate disposition data shall include date of disposal and method of disposal. Method of disposal includes trade-in, sale price, loss, theft or salvage. OMB Circular A-110 requires that records for equipment acquired with federal funds be retained for three years after final disposition.

Fully depreciated assets which are still being utilized should remain on the inventory records.