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Equipment Policy

OSU Equipment Policy

Special consideration should be given when budgeting items costing $5000 or more in a proposal to ensure items are identified properly as capital equipment. Since capital equipment is not subject to Facilities and Administrative Costs (F&A Costs), misidentifying items in the budget as equipment can cause budget shortfalls. This document is to aid budget developers in properly identifying equipment in their budgets.  If sponsor guidelines differ from OSU's policy, the PI needs to provide a copy of the sponsor guidelines, which will supersede OSU policies.

Equipment is defined as any piece of tangible personal property with a unit value of $5,000 or more, a life expectancy of more than one year, and which is not consumed in the normal course of operation, unless the sponsor specifies otherwise. Equipment includes both purchase and construction of equipment and vessels. Equipment should be listed on the budget with a description and cost of each item. The cost to have equipment (capitalized equipment) installed or built should be included with the equipment cost.

For Equipment Lease-Purchase, only the equipment cost should be included in the budget. The department must cover the lease-purchase interest costs from department funds. Equipment lease (not lease-purchase), is treated as an Other Direct Cost.

Following is a list of items not considered equipment and thus should be budgeted with full F&A costs:

Training costs related to equipment must be broken out under Other Direct Costs - training costs are expense items, not capitalized equipment.
Does this item fall under this definition? Yes   No
If yes, then charge full F&A costs.

Software is not considered equipment unless it is included in the purchase price of a computer. If software is listed as a separate item, it should be listed as an expendable supply, not as capitalized equipment.
Does this item fall under this definition? Yes   No
If yes, then charge full F&A costs.

Extended Warranties on capital equipment cannot be capitalized and therefore are subject to F&A Costs.
Does this item fall under this definition? Yes   No
If yes, then charge full F&A costs.

The modification or reconditioning (eg. Upgrades) of a piece of equipment outside of the original fiscal year in which it was purchased is not a capital expense and should not be budgeted as equipment. These costs should be budgeted under materials and supplies.
Does this item fall under this definition? Yes   No
If yes, then charge full F&A costs.

Attachments must be a permanent part of the parent asset for its useful life and the parent and attachment are disposed of as a unit.   For example, a monitor is not an attachment to a CPU as it can be removed and disposed of separately from the CPU.
Does this item fall under this definition? Yes   No
If yes, then charge full F&A costs.

For questions please contact Janna Storm, Property Coordinator, 737-3976.