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Policies and Procedures

Policy 601 – Definition of Capital Equipment

January 1, 1999
Last Updated
October 6, 2014
Last Reviewed
October 6, 2014
Responsible University Officer
Director of Logistics
Responsible Unit

Policy Statement

Equipment qualifying as a capital asset is defined as an item with an acquisition cost of $5,000 or more. The acquisition cost of equipment includes installation charges and freight. Capitalized equipment can be identified as having all of the following characteristics:

  • Acquisition cost equal to or greater than $5,000
  • Life span in excess of one year
  • Contains or is made of non-expendable material
  • Is not made for consumption

The capital asset account ranges are as follows:

  • 545110 – 545212 - Office Furniture and Office Equipment
  • 545360, 547110, 545370, 547120 - EDP Equipment and EDP Software (Software cost must be equal to or greater than $100,000. This object code is not for software licenses – use account 531210).
  • 545230, 545130, 545250, 545270, 545380 - Educational Equipment
  • 545410 – 545490 - Motor Vehicles, Aircraft, Boats, Trailers
  • 545340, 545343 - Other Equipment

Reason for Policy

The University establishes this policy in compliance with the Office of Management and Budget Circular A-21, J.14, a-h(2)


Items that do not qualify as capital assets are, as follows:

  • Movable wall/office partitions
  • Software with a cost of less than $100,000
  • Software licenses with a unit cost of less than $100,000
  • Plumbing fixtures (sinks, etc.)
  • Repairs and replacements: repair to equipment and the replacement of equipment components that maintain or restore value
  • Equipment maintenance contracts
  • Diamond knives
  • Quartz, crystals and reagents
  • Modular furniture: furniture priced by the piece that can be assembled in various ways, thus continually altering cost and value
  • Computer clusters: each independently housed or cased PC, server, or other computing component that contains its own mainboard (central logic board). Each component will be accounted for as a separate item, for fiscal and asset tracking purposes.

Special Situations

Lease/Purchase items are considered equipment if it meets equipment criteria. This type of lease is not a rental agreement.

Additions to existing equipment, costing $5,000 or more per item, become part of the original equipment. An addition should reference the original UNC Asset Management decal number of the equipment on the requisition. An example of an addition (if $5,000 or more) is as follows:

  • Additional sorter to a copier
  • Additional lens to a microscope


  • None

Additional Information

Frequently Asked Questions

Q: We are setting up a lab for our new PI and the total cost of everything is over $5,000. Should this be purchased on an equipment account?
A: Each individual item must cost $5,000 or greater to be considered capitalized equipment. In this case a supply account (537210) would be used.

Q: A server with a cost of $5,600 was ordered and paid on account (538110) in error. How do I get this item tagged and added to our inventory?
A: Provide Asset Management the purchase order number and/or account number that it was paid on and he/she will add the item to your inventory.

Q: Our department is renovating a lab and will be replacing the counters and sinks. Is this considered equipment?
A: No, this is not considered equipment. If it is affixed to the building and has electrical or plumbing connections that would require extensive repairs if removed it should be charged as a repair or maintenance for the building.

Q: Our department is ordering a 14-node PC cluster which we consider one unit. Is this considered equipment?
A: Each independently housed or cased PC, server or other computing component that contains its own mainboard (central logic board) and CPU (s) is accounted for as a separate unit (whether or not it is directly attached to a monitor, keyboard, mouse or network connection) for asset tracking purposes.

Q: The item the doctor wishes to order is called a "shearing set up". It consists of the following: A package of 6x stir bars at $100, six viscometers at $3,000 ($500 each), a base plate at $550, and a stir plate at $1,500, for a total cost of $5,150. Is this equipment?
A: No, these items are supply items. Even though they may be used together to produce a result, the items could be used individually for other purposes.

Q: How can I avoid paying unexpected F&A charges?
A: At the time of proposal submission, ensure that everything being identified as equipment meets the "Definition of Controlled Equipment" for the University. Classifying an item as equipment in the proposal that does not meet the University's definition results in charges being moved to supplies and the F&A charges assessed to the account. Classifying the items correctly in the proposal ensures that the F&A will be covered by the granting agency.

Related Data

603 - Equipment Inventory and Reporting
NC Office of State Controller, Capitalization/Classification Policy


Capital Equipment Logistics- Capital Equipment 919-962-6267 919-962-6271


October 1, 2014: Added account numbers used in ConnectCarolina system.
July 8, 2010
July 23, 2009
November 15, 2001