602.2 - Procedure for Purchasing and Trading in of Capital Equipment



This procedure is to provide basic guidance related to the purchasing and trading-in of capital equipment.

Scope of Applicability

This Procedure applies to all employees of the University of North Carolina at Chapel Hill ("University").



When purchasing or trading capital equipment, the Principal Investigator and/or departmental administrative personnel assisting in the acquisition of equipment must adhere to University purchasing procedures. When anticipating a purchase, contact Purchasing Services. Purchasing Services will handle the required purchase orders. The Asset Management team will run a report identifying all purchase orders greater than or equal to the capitalization threshold, monitor the purchases and identify equipment that should be capitalized based on the University's capitalization rules (See Finance Policy 601 - Policy on Capital Assets). Only equipment acquisitions that meet the Office of the State Controller (OSC) capitalization requirements can be reported on the University's financial statements as capital assets. Those not meeting the OSC capitalization requirements should be expensed by the department or unit. Equipment is to be recorded at the purchase price plus shipping fees, setup costs and legal fees.


University-owned surplus property may be traded in for new equipment, through the purchase order system.

When anticipating a trade, contact Purchasing Services. Purchasing Services will handle the required approvals to trade the old equipment for new equipment through the State Surplus Property Office.  When State Surplus approves the trade, Purchasing Services will place the purchase order. After the approved purchase order is placed and the equipment being traded is prepared to leave campus, the department or unit trading the item should remove the University Asset Management decals from the equipment and affix the decals to Finance Form 603.5.1f - Capital Equipment Relocation Form. This form notifies Asset of the transaction so that department inventories can be updated. The new equipment is to be recorded at the purchase price plus shipping fees, setup costs, and legal fees. The traded-in capital asset is recorded at Net Book Value amount (if available) or market value.

Formal approval is normally required from federal agencies (occasionally delegated to the Office of Sponsored Research (OSR) prior to purchasing equipment if not listed in the approved proposal/budget. The Principal investigator may compile a list of all anticipated equipment for a one-time approval in order to reduce the paperwork and time necessitated by approving each piece of equipment separately.




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. Could a non-capital asset be traded in for new capital equipment?

A. Non-capital assets must be expensed out by campus departments. The departmental head must adhere to University purchasing procedures on the trade-in.

Q. Could we purchase capital equipment with a Buy 1 Get 2 promotion (Buy 2 Get 3)?

A. Yes. Record the fully-paid capital purchase at the purchase price plus shipping fees, setup costs, and legal fees, if any. The free items should be recorded as a gift/donation to the University (see Finance Procedure 602.1 - Procedure for Receiving Gifts and Donations of Capital Equipment to the University).

Q. How do we handle the trade-in discount?

A: List the trade-in discount as a separate line in the requisition of new equipment.

Related Requirements

External Regulations and Consequences

University Policies, Standards, and Procedures


Contact Information

Primary Contact

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Article ID: 131669
Thu 4/8/21 9:14 PM
Tue 10/31/23 1:20 PM
Effective Date
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05/27/2022 12:00 AM
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Director, eProcurement and Materials Management
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01/10/2022 10:00 AM
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01/11/2022 10:00 AM
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01/06/2025 10:00 AM
Date on which the original version of this document was first made official.
07/01/1997 12:00 AM
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Finance and Budget