99-6 Obsolete

Postponement of the Capitalization Threshold Change
June 30, 1999

Note: This Important Notice is being sent to Account Managers, Chairpersons, Deans and Chancellors. Please forward to others who have a need to know.)

Important Notice 99-5 previously announced that effective July 1, 1999, the threshold amount for the capitalization of equipment would be raised from $1,000 to $5,000. Due to procedural difficulties in obtaining formal approval from the Department of Health and Human Services (DHHS), this change has been postponed. Instead, the capitalization limit of $5,000 will be implemented on July 1, 2002 along with the next F&A agreement.

As a result of these events, please take note of the following:

For now, the capital equipment threshold will remain $1,000.

DHHS has agreed to allow the university to discontinue the tagging and inventorying of items between $1,000 and $4,999.99 as of July 1, 1999. However, this equipment will continue to be accounted for in the Capital Asset Management System.

Equipment should continue to be budgeted at the $1,000 threshold (with no F&A costs) on external proposals through the period of the current F&A agreement, June 30, 2002. If a proposal is prepared that requests funds for budget periods after June 30, 2002, equipment should be budgeted at the $5,000 threshold (items less than $5,000 will be assessed F&A costs).

Please adhere to the following table when coding purchases and cost transfers:

Cost	Object Code	Description	F&A Cost Applied
$0 – 999.99	4910	General Durables < $500	YES
	4616	Computer Software < $1,000	YES
	5200	Expendable Equipment > $500 and < $1,000	YES
	5215	Expendable Computer Equip. > $500 and < $1,000	YES
$1,000 or >	7XXX	Appropriate capital object	NO
DO NOT USE	5202	Non-capital Equipment
	5217	Non-capital Computer Equipment
	5218	Non-capital Software
	4908	Expendable Computer Equipment < $1,000