Equipment Capitalization Policy
Policy
Capital equipment at Dartmouth College is tangible personal property having a useful life of one year or more and an acquisition cost of $5,000 or more per unit. All equipment meeting this definition should be recorded on the College's equipment inventory and should be tagged with a control number for tracking purposes.
Acquisition cost is 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, transportation, taxes, duty or protective in-transit insurance, shall be included in determining the acquisition cost.
NOTE: No capital equipment may be purchased during the last 6 months on a sponsored research PTA Account.
Helpful Links:
Property, Plant and Equipment Management
Property, Plant, and Equipment Policies
Appendix D: The Plant, Property & Equipment Procurement Requisition Decision Tree
Title to Capital Equipment
Dartmouth College retains ownership of or title to most capital equipment purchased with sponsored research funds. Equipment should not be sold, transferred, or otherwise disposed of without first notifying the Director of the Office of Sponsored Projects. OSP staff are responsible for researching and determining agency specific regulations governing the sale, transfer, or disposal of equipment purchased with sponsored project funds. General guidelines concerning title to capital equipment permits full vesting upon close-out of the award under which the property was acquired.
Government-furnished equipment remains the property of the awarding agency. The agency retains the right to recall such property for use in other research areas. For this reason, on an annual basis, the college needs to account for all such equipment in its possession. Because receipt of this equipment does not follow Dartmouth's established purchasing procedures, the OSP is not systematically informed of the equipment's existence on campus. It is, therefore, imperative that Principal Investigator's report the existence of all government-furnished equipment to the OSP. Principal Investigator's should report this information both when the equipment is received and if or when it is relocated. All items of government-furnished equipment must bear a label identifying the equipment as belonging to the US government. Disposition of such equipment remains the prerogative of the awarding agency.
Types of Equipment
Personal Computers
All personal computer system packages valued at $5,000 or more are to be recorded on the equipment inventory. PC system packages consist of a central processing unit (CPU), system software, and all accessories necessary to make the property operable. The value of computer monitors purchased with PC systems should be capitalized as part of the PC system. Monitors purchased as replacements or upgrades to existing systems are to be accounted for in the manner outlined below under 'Repairs, Replacements, and Upgrades.'
Software
Software is intangible property and is not considered capital equipment under this policy. The value of pre-loaded computer software may be included in the cost of the equipment recorded on the College's inventory when the cost of this software is not separately identified on the sales invoice. Major systems software valued at $25,000 or more may be capitalized for financial statement purposes. Please refer questions regarding capitalization of major systems software to the Controller's Office.
Accessory Equipment
The cost of an accessory purchased separately – after the equipment has been received and made operable – should not be added to the value of an item of capital equipment listed on the inventory. When an accessory meets all the criteria of capital equipment (i.e., it is tangible personal property having a useful life of one or more years and an acquisition cost of $5,000 or more), it should be treated as a separate item of capital equipment and assigned a Dartmouth College control number and recorded on the College's equipment inventory.
Repairs, Replacements, and Upgrades
Equipment repair, replacement, and upgrade costs will be capitalized only when these costs are $5,000 or more and they extend the useful life of the original piece of equipment by one year or more. When these costs are capitalized, the asset value and useful life of the original piece of equipment as recorded on the College's equipment inventory should be updated to reflect the new value and remaining useful life of the asset.
Donated Equipment
Equipment donated to the College by a third party is covered by this policy. For capitalization and inventory purposes, the recorded value of the donated equipment should be the fair market value of the equipment at the date of the gift. Generally, the fair market value of such an item of property is the price at which the item or a comparable item would be sold at retail, taking into consideration the age and condition of the property on the date of the gift.
Capitalized Manufactured Equipment
Capitalized manufactured equipment is equipment that is assembled or manufactured by the College using purchased materials, in-house machinery or tools and College labor. Manufactured equipment valued at $5,000 or more and having a useful life of one year or more shall be capitalized and recorded on the College's equipment inventory. Departments manufacturing equipment are responsible for determining the cost of the equipment. Additionally, it is the responsibility of the department to notify the Purchasing Department of the equipment's existence.
Capitalization of Fabricated Equipment
Capitalized fabricated equipment is equipment that is assembled or manufactured by the College using purchased materials, in-house machinery or tools and College labor. Fabricated equipment valued at $5,000 or more and having a useful life of one year or more shall be capitalized and recorded on the College's equipment inventory.
Principal Investigator's fabricating equipment, are responsible for determining the cost of the equipment. Additionally, it is the responsibility of Principal Investigator's, or their respective department(s), to notify the Fixed Assets Coordinator of Procurement Services, of the equipment's existence or the start of a fabricating project.
Capital Equipment Transfer Guidelines
In special circumstances, such as the transfer of a Principal Investigator to another institution in which the Principal Investigator wishes to also transfer capital equipment purchased on their sponsored project awards, arrangements can be made to transfer capital equipment with written prior approval by the Faculty/Staff Member requesting the transfer, Department Chair, Director, Office of Sponsored Project and appropriate Fiscal Officer. In some instances, we may need additional prior approval from the sponsor. Transferring capital equipment may also involve reimbursement to the College.
The Equipment Transfer Request Form needs to be completed each time capital equipment is being requested to be transferred to another institution.
NOTE: Equipment Transfer Requests involving grants managed by Geisel will need to be approved by the Geisel Fiscal Office prior to having OSP approve.