I. Background

Accurate maintenance of property records is essential in order to assure safeguarded assets, financial accountability, reporting accuracy, adequate insurance coverage and efficient utilization of property already on hand. This paper establishes a systemwide policy to ensure that these objectives are achieved.

II. Constraints

In addition to the policies and procedures set forth in this paper, personal property is subject to the following rules and regulations:

III. Definitions of Terms

“Capital equipment” is defined as any single asset which has an acquisition cost of $5,000 or more and a useful life of at least two years, whether purchased outright, acquired through a capital lease or through donation. It also includes certain constructed or fabricated items and certain component parts (See UW Shared Financial System Accounts and Definitions). It does not include real property (land), software or library holdings (see UW System Administrative Policy 332 (SYS 332), Financial Reporting of Library Holdings).

Capital class codes are used for certain software acquisitions to conform with the class code usage mandated by the Department of Administration. However, the cost of purchased software should not be capitalized for financial reporting purposes since such software is generally licensed and not owned, even if the license agreement allows perpetual use of the software without additional license payments. While not subject to this capital equipment policy, computer software should be inventoried to ensure accountability and to maximize effective use of resources.

IV. Policy

Each institution shall maintain an inventory system and internal procedures which will ensure accountability for capital equipment and the accuracy of information for financial reports and indirect cost calculations. Specific requirements are included in the attachments as follows:

Attachments

Attachment A: Inventory System Information Requirements

Attachment B: Write-off and Disposal of Inventoried Items

Attachment C: Physical Inventory Requirements

Attachment D: Financial Reporting Requirements

Attachment E: Indirect Cost Calculations

Attachment F: Property Purchased in Whole or in Part with Federal Funds

Attachment G: Capital Equipment Useful Life/Depreciation Schedule