MEMO
TO: DDDEO Listserv, Grant Accounting Listserv, BO Accounting Services Listserv
FROM: Terry Johnson, Controller
RE: Change in Equipment Capitalization Threshold
DATE: March 3, 2005
Effective July 1, 2005 the equipment capitalization threshold will be increased to $5,000. This change does not apply to assets purchased on Org 70, 80 and 85 funds. For these org units the capitalization threshold will remain at $2,000.
This change has been approved by the federal government for cost accounting purposes and is documented on pg. 3 of the most recent rate agreement dated January 18, 2005 http://www.uiowa.edu/~fusfm/AGMTCURR.pdf
With this change in capitalization threshold, equipment purchases below $5,000 will be considered expense items and will be assessed applicable F&A cost for grant accounts. This will require close coordination between grant administrators and the Grant Accounting Office to ensure that each grant is assessed F&A in accordance with the capitalization threshold in effect when the grant proposal was submitted to the sponsoring agency. If you have any questions, please contact the Grant Accounting Office.
Please reflect this change in capitalization threshold as you develop budgets and proposals for fiscal year 2006 and beyond.
