602 - University of North Carolina at Chapel Hill Policy on Acquisition of Equipment

Introduction

Purpose

This policy clarifies the channels of acquisition for equipment that is added to the University of North Carolina at Chapel Hill's ("University") database for financial reporting.

Scope of Applicability

This Policy applies to all employees of the University.

Policy

Policy Statement

Capital equipment is acquired through any of the following methods:

  • Direct purchase through University purchase orders Lease/purchase
  • Transfer from other universities when accompanying newly employed faculty
  • Transfer from Federal agencies for research projects
  • Gifts to the University
  • Fabrication
  • Purchase from the North Carolina Federal Surplus Property Agency (these items have utilization restrictions)
  • Purchase from the North Carolina State Surplus Property Agency

Definitions

Capital Equipment  - Equipment with a useful life of two or more years are capitalized if the acquisition cost is $5,000 or more per item or aggregate component parts, contains or is made of non-expendable material and is not made for consumption. The acquisition cost of equipment includes installation charges and freight. See Finance Policy 601 - Policy on Capital Assets for more details.

Frequently Asked Questions

Q: We have a $10,000 limit on our PCard. Can we purchase a piece of equipment at a cost of $7,000 with the card?
A: No. Equipment with a cost of $5,000 or more cannot be purchased using the PCard. Capitalized equipment can only be purchased via a purchase requisition.

Q: A Principle Investigator transferred here and brought his lab equipment with him. How do I have these items added to the department's inventory?
A: Request the department business office to provide a listing of the items transferred with the Principal Investigator to Asset Management. Each item listed should include its acquisition date, description, make, model, serial number, and original cost. Asset Management will compute each item's depreciated value. If the item meets the University's capitalization threshold of $5,000, Asset Management will request the current location of the item and add it to the department's inventory.

Exceptions

Capital equipment is not acquired through any of the following methods:

  • A lease that does not contain a transfer of ownership or a bargain option buy-out price
  • A lease term that is not greater than or equal to 75% of the economic life of the leased equipment
  • The present value of the minimum lease payments is not greater than or equal to 90% fair market value of the leased equipment

University funds may not be used to upgrade equipment not owned by the University.

Acquisition of equipment that includes a trade-in requires the approval from the State Surplus Property Agency. See the University of North Carolina at Chapel Hill Finance Procedure 604.1 - Procedure on Disposing of University-Owned Surplus Property.

Related Requirements

External Regulations and Consequences

University Policies, Standards, and Procedures

Contact Information

Primary Contact

History

Revised:

  • May 27, 2022
  • July 7, 2010
  • July 16, 2009
  • November 3, 1999