201: Equipment Acquisition - General

Purpose

To define general guidelines for the acquisition of university-funded and sponsor-funded equipment.

Background Information

Inventorying equipment or fixed assets is an accounting procedure, as well as, a procedure for physically tracking assets. The creation of preliminary inventory records is an automatic part of the invoice payment process for equipment acquired with OSU-administered funds on Banner FIS.

Policy

Individual departments may purchase equipment using state, sponsored, affiliated foundation pass-through, and auxiliary funds. Regardless of the source of funds, all purchases must be made in accordance with applicable federal and state law and Oregon University System and OSU policies.

Equipment acquisitions may be made by purchase, installment purchase, lease/purchase, lease, loan, gift, transfer, trade, or fabrication. The equipment may be new or used. The acquisition cost must be =>$5,000 per unit/item to be capitalized as equipment (40xxx account codes). All other movable equipment of a lesser amount will be accounted for as minor equipment (202xx account codes).

Allowable acquisition costs include any costs related to the obtainment and installation of the equipment such as the purchase price, shipping, and installation fees. Also, all costs related to the importation of equipment from foreign countries [such as entry fee, broker's fee, cartage fee, custom's bond, import service fee and custom duty fees] are allowable as part of the acquisition cost.

Unallowable costs include extended maintenance, warranties and training.

Software in the purchase of equipment which is separately itemized on a vendor invoice is not capitalized. This cost is expensed as 20202 "software."

Buy, Fabricate, Lease/Rent Policy
When determining the best method to acquire equipment, the following considerations should be made:

• The method chosen should be in the best interest of the University.
• The method chosen should be the most cost effective.
• The method chosen should not be used to circumvent normal procurement procedures.

Fabrication (assembly) of a Capitalized Unit
See PRO 210 for guidance on what constitutes a fabricated piece of equipment and specific approval procedures for fabricated units.

Ways of Acquiring Ownership (Title) of Equipment
OSU may acquire ownership of equipment in several ways including, but not limited to, the following:

1. purchase or fabrication of equipment using state, affiliated foundation flow-through, or auxiliary funds,
2. purchase or fabrication of equipment using federal or non-federal sponsored funds for which the award document states that OSU retains title upon receipt of the equipment,
3. purchase or fabrication of equipment using federal or non-federal sponsored funds for which equipment title is vested with the sponsor and subsequently transferred to OSU at the completion of the project,
4. donation of equipment,
5. lease/purchase of equipment after the lease/purchase option has been exercised. Normally, lease/purchase equipment is treated as university equipment when the first installment payment is made.

Ways of Acquiring Use of Equipment (not Title)
OSU may acquire the use of equipment, though not ownership, by receiving the following:

• government-furnished property (GFP), with title vesting with the government,
• loaned equipment, with title remaining with the lender, or
• purchased or fabricated equipment using federal or non-federal sponsored funds for which equipment title remains vested with the sponsor.