With a subset of the University’s movable equipment being purchased by federal sponsored grants, the University’s property management standards for movable equipment must meet federal regulations (Uniform Guidance 200.313) governing management and disposition of property. Accounting for UVM's movable equipment is performed in accordance with the University's Movable Equipment Policy (PDF) and Disposal of Surplus Property & Movable Equipment Policy (PDF) by Cost Accounting Services within University Financial Services.
"Movable equipment" is any tangible, non-expendable, institutional personal property that has an anticipated useful life of one year or more with an acquisition cost of $5,000 or more. Equipment under $5K is considered expendable and is outside the University's definition of movable equipment. Common classes of movable equipment include scientific equipment, computer equipment, vehicles, and furniture.
- Movable Equipment
- An article of non-expendable, tangible, personal property which stands alone, is complete in itself, does not lose its identity, has a useful life of more than one year, and has an acquisition cost of $5,000 or more
- Capital Movable Equipment
- An article of non-expendable, tangible, personal property which stands alone, is complete in itself, does not lose its identity, has a useful life of more than one year, and has an acquisition cost of $100,000 or more.
- Fair Market Value
- Cost at acquisition in an arm’s length transaction, or at appraised value for gifts.
- Fixed Equipment
- Permanently attached fixtures, machinery, and other appurtenances that cannot be removed without cutting into walls, ceilings, or floors or otherwise damaging the building.
Departments should follow these procedures when using the University’s requisition process to purchase movable equipment:
- Determine the Unit Acquisition Cost: The equipment unit cost is net invoice price of the equipment including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment operable. Other charges such as the cost of installation, configuration, shipping/freight, handling, duty, and protective in-transit insurance, should also be included. If multiple units are being purchased, allocate costs such as shipping to each unit to determine the correct unit acquisition cost (e.g., two computers that total $6,000 have a unit acquisition cost of $3,000). Training, maintenance, and warranties should not be included in the equipment unit acquisition cost.
- Factor in any equipment trade-in allowance: When acquiring movable equipment, the department may use existing equipment as a trade-in to offset the cost of the new equipment. The cost of the movable equipment will be net of any trade-in value. For instance, if a movable equipment item costs $7,000 and the trade-in amount is $1,000 dollars, the recorded cost of the equipment in the Asset Management record would be $6,000.
- Select the correct purchasing category (search on descriptions): Upon determining the unit acquisition cost, select the correct purchasing category for equipment. The clear descriptions of the purchasing categories include the expense account for easy searching and common unit cost items (shipping, installation, transit insurance). By including the common unit cost items in a purchasing category, the requisition line items are minimized.
Example #1: Equipment unit acquisition cost is $50,000 ($50K). The cost items of the equipment unit include shipping and installation. Training is included but is not part of the unit cost. Upon searching the purchasing descriptions in the PeopleSoft requisition screen, the appropriate purchasing category description for the equipment unit is "65007-Moveable Equipment $5K to $100K & Install,Shipping,Ins". The appropriate purchasing category description for the equipment training service costs would be "61207- Equipment Training Services". A total of two requisition lines would be required for this requisition example.
Example #2: A new vehicle acquisition cost is $10,000 ($10K). New plates are required as part of this vehicle acquisition. The purchasing category description for the vehicle would be "65061- Vehicle cost between $5K and $100K". Since the cost of new plates are not included in the vehicle unit costs, the purchasing category description for new plates would be "63122- Vehicle Registration (new license plates only)". A total of two requisition lines would be required for this vehicle requisition example.
Whether or not a piece of movable equipment is available for transfer or not depends in part on the funding source and use of the equipment item(s). Per the University's Movable Equipment Policy (PDF), equipment acquired via a federal sponsored agreement has usage requirements even when the equipment is vested with the University. Once the necessary due diligence of assessing whether other opportunities exist or not for using an equipment item as described in the Movable Equipment policy, follow the guidance below for internal and external equipment transfers:
- Internal transfer between UVM departments - An equipment item may be transferred to another University department. Written communication must be emailed to Cost Accounting Services that clearly states the pending transfer agreement between the two departments.
- Equipment transfer from UVM to an external organization (funded by an active sponsored agreement) - When a Principal Investigator (PI) is transferring to another organization and an active sponsored agreement is being relinquished by the University to the PI's new organization, movable equipment purchased by the active sponsored agreement is typically transferred to the new organization of the PI. A list of the movable equipment must be submitted as part of the relinquishing request documentation to Sponsored Project Administration and Cost Accounting Services for consideration and processing. The list of information should include the University's asset tag number, description, model number, and serial number.
- Equipment transfer from UVM to an external organization (equipment is owned by the University) - If a federal sponsored agreement originally paid for part or all of the movable equipment, the equipment must be made available to other federal sponsored agreements. If other federal programs do not need the movable equipment, then the University responsible official of the equipment item(s) must approve the request before the request is submitted to Cost Accounting Services. The request should include the University's asset tag number, description, model number, and serial number.
- External transfer from an external organization to UVM - When equipment whose book value is 5,000 or more is transferring from an external organization to UVM as part of a faculty member's transfer to UVM, the equipment must be tagged and be included in the official University asset database for insurance purposes. Upon arrival of the equipment, contact Cost Accounting Services and schedule the tagging of the equipment. For transfers requiring the sale of movable equipment to an external organization, contact Cost Accounting Services for guidance on proper sales procedures and recommendations on achieving the highest possible return for the University.
Prior to the disposition of movable equipment by a department, the department shall notify its respective College/School/Unit to determine whether the equipment item can be used within its College, School, or Unit. Each Dean’s office or Unit shall retain a record of their ultimate disposition of each equipment item for audit purposes. Upon approval to disposition the equipment by the College, School, or Unit, the department shall use the appropriate disposal business procedures outlined by the Disposal of Surplus Property & Movable Equipment Policy (PDF).
What is the difference between movable equipment and fixed equipment?
Fixed Equipment is permanently attached fixtures, machinery, and other appurtenances that cannot be removed without cutting into walls, ceilings, or floors or otherwise damaging the building. Movable equipment stands alone and can be moved without impacting the building. If you have any questions in determining whether an item is fixed or movable equipment, email Cost Accounting Services for help.
Why are some expense accounts used to account for equipment less than $5,000?
Although expense accounts such as "65002 - Other Equipment <$5000" does not fall within the definition of movable equipment, expense accounts were established to help departments account for similar University movable property.
What costs are included in the unit acquisition cost of movable equipment?
The net invoice price of the equipment including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment operable. Other charges such as the cost of installation, configuration, shipping/freight, handling, duty, and protective in-transit insurance, shall be included in determining the acquisition cost. Training, maintenance and warranties should not be included in the unit acquisition cost.
What if costs such as maintenance and warranties are included into one inclusive cost ("bundling") item on the supplier’s quote and the primary item meets the $5,000 minimum threshold?
For bundled costs, the entire cost can be charged to the unit acquisition cost of a movable equipment item. If any item is itemized with a separate cost on the quote, the item must be charged to the proper expense account. For example, if software maintenance is itemized separately, the cost of software maintenance would be charged to "65103 - Software Maintenance".
How important is selecting the purchasing category during the requisition process in accounting for movable equipment correctly?
It is very important. Expense accounts are assigned to each purchasing category. Determining which costs are included in the Unit Acquisition cost and whether the Unit Acquisition cost is equal or greater than $5,000 should occur before selecting the purchasing category. Any line items on a requisition which are included in the unit acquisition cost should have the same purchasing category.
What are common pitfalls to avoid during the submission of a requisition to buy movable equipment?
The most common oversight is not accurately determining which costs are included in the Unit Acquisition cost of a movable equipment item. When ordering multiple units of the same movable equipment item, the unit acquisition cost is critical in determining whether it meets the $5,000 threshold of movable equipment. Line items on a requisition which include costs of the unit acquisition cost such as shipping should have the same purchasing category.
May I use the University’s purchasing card program to purchase Movable Equipment?
No. Requisitions must be used to purchase movable equipment.
When are repairs and upgrades to an existing movable equipment item considered movable equipment?
When the value is $5,000 or more and the action extends the useful life of the original piece of equipment by one year or more, equipment repair, replacement, and upgrade costs will be included in the University's Asset Management System. A new asset will be created in the Asset Management system with a new asset ID and be classified as a component of the original movable equipment item.
May I trade in my existing equipment and use the proceeds to offset the purchase of new movable equipment?
Yes. Enter the asset tag number and the trade-in allowance amount on a line item in the requisition. In addition, email the model number, serial #, UVM Asset ID and a description of the trade-in equipment item to email@example.com for audit trail purposes.
Is donated equipment addressed by the University's movable equipment policy?
Yes. For donated movable equipment, the department is responsible to follow the University’s gift acceptance guide as well as ensuring the equipment is sufficiently evaluated for correctness and completeness and is in good working order. The unit acquisition cost of the donated equipment will be the fair market value of the equipment at the date of the gift and must be greater than or equal to $5,000 to be considered movable equipment. Contact Cost Accounting Services to tag any donated movable equipment items that have values which are equal or greater than $5,000.
Which department do I notify to tag a movable equipment item in my department?
Cost Accounting Services oversees the University asset management database and is responsible for working with departments to apply a unique asset tag on each movable equipment item. All movable equipment items should have a visible asset tag unless agreed to by Cost Accounting Services. Email firstname.lastname@example.org to schedule a movable equipment item to be tagged.
What are the departmental responsibilities of assigned movable equipment?
See the Movable Equipment Policy.
When is the annual movable equipment inventory performed?
The movable equipment inventory is part of the Space and Equipment Inventory that is conducted each spring.
What QA steps should department personnel who are conducting the inventory take to ensure the completeness of their inventory prior to submitting to Cost Accounting Services?
- Rerun the UVM PeopleSoft Report Mov_Equip by Dept w/ Comments and to confirm the last inventory dates are in the fiscal year being inventoried.
- Confirm that off-campus movable equipment e.g. vehicles have been inventoried and ensure a comment of the inventory results has been added on the excel spreadsheet.
- Confirm equipment in other departmental space has been physically inventoried
- Confirm that the dispositioned movable equipment is reflected on your updated movable equipment excel spreadsheet
What are the guidelines for transferring equipment?
There are four types of transfers that have different procedures. See the Movable Equipment Policy for guidance.
May I sell used movable equipment using on-line auction sites such as eBAY?
No. The University's appropriate disposal business procedures outlined by UVM's Surplus Disposal policy must be used.
May I donate movable equipment to an organization or employee?
Upon obtaining approval from the Surplus Property Program and the Controller, donating movable equipment including surplus computers to employees is allowable. Please refer to the UVM Surplus Disposal Policy for more details.