What is considered an asset?

An asset is defined as long-term, tangible, property owned by the University that cannot be easily converted to cash and will be held for a long period. For most departments, this translates to equipment. The University of Nebraska capitalization policy states that all equipment purchased with a unit cost of $5,000 or more that has a useful life of more than one year is an asset and must be tagged/capitalized. Buildings, land and land improvements are also assets that are capitalized but not tagged. For more information on assets, see the University of Nebraska capitalization policy. Click here for information on equipment systems.

Does all equipment that costs $5,000 or more get tagged/capitalized?

No. The following items are never capitalized regardless of their cost:

• Blinds, Shades, wall-to-wall carpeting and similar items
• Computer software
• Equipment that is permanently built-in or installed
• Library book, art and museum objects
• Cubicle walls, shelving, lockers and trophies

How do I know when an item should be expensed rather than capitalized?

Repair/replacement/spare parts or components are not tagged/capitalized and the cost should be expensed. Materials consumed in the day-to-day operation of the University are considered supplies and therefore are not tagged/capitalized and should be expensed. If parts or components are purchased to upgrade an existing tagged/capitalized asset (whether it extends the life or not), the upgrade cost will be capitalized by adding to the cost of the original asset. When an existing tagged/capitalized asset is completely replaced, the old asset will be retired and the new asset will be tagged/capitalized if its unit cost is $5,000 or more.

What is the difference between moveable and fixed equipment?

Moveable equipment is generally an item that is purchased as one unit to operate as a stand-alone unit or work and function as a system and can be moved somewhat easily. This may mean taking a skid loader to move but it doesn't require tearing down walls, etc. Moveable equipment is tagged/capitalized if it meets the criteria in the capitalization policy.

Fixed equipment is equipment that is built in or permanently installed in a building or structure, typically before building completion. Examples of this are fume hoods, lighting fixtures, HVAC ductwork, etc. Fixed equipment is generally not tagged but is capitalized as part of the building provided the cost of the project is $500,000 or more. When the project total is less then $500,000, the associated fixed equipment would not be capitalized as part of the project because the project does not meet the building capitalization threshold. Therefore, it should be tagged and classified as a separate asset in order to capitalize the expense. For example, a reverse osmosis system would normally be considered part of the building and classified as fixed equipment. But if a building did not have a reverse osmosis system installed when it was originally constructed and you are installing one post construction, the system needs to be tagged/capitalized despite being a "fixed" piece of equipment.

How do I dispose of capitalized/tagged equipment?

See the UNL Property Policy for steps to dispose of excess property.

How do I transfer capitalized/tagged equipment to another department?

See the UNL Property Policy for transfer procedures. Look at section titled "By Transfer."

How do I trade-in existing capitalized/tagged equipment for new equipment?

See the UNL Property Policy for transfer procedures. Look at section titled "Trade-In."

How do I report a non-monetary donation or gift?

Regardless of the value, the procedure to report non-monetary donations and gifts (equipment, land, etc.) received from outside sources is to complete the Donation/Gift Form. The value of each donation will be recorded to the cost object that you supply. The recorded gift revenue and corresponding expense will net to zero and have no effect on the balance in the provided cost object. If the value of the donation or gift meets the criteria in the capitalization policy, it will be tagged/capitalized.