What is an equipment system?

Equipment systems are defined as scientific or other complex systems comprised of a number of individual equipment components that are part of a functional unit that is capitalized as a single asset for a combined total cost. All components must function as a part of a system and will be collectively disposed of at the end of the useful life of the system. If audited, departments must be able to justify that the components comprise a system.
Please note: If a computer is purchased because it is required to run a complex scientific system and the system cannot function without it, the computer can be capitalized as part of the system. However, the computer MUST be used strictly for that system and cannot be used in any other capacity.

For more detail on the definition of equipment systems, see the University of Nebraska capitalization policy.

Procedures

1. Notify Becky Hastings in Inventory and Jenny Gilmore in Accounting when orders are placed that the items being ordered are part of a system so they can ensure that individual components over $5,000 do not get tagged separately from the system. If notification is not received in advance of system purchases, any individual components over $5,000 will be tagged separately and any items under $5,000 will be expensed. System capitalization will not be applied retroactively. Also, systems not fully complete at year end require special processing.
2. Charge all capital components (click here for information on which costs should be capitalized) to 553820 (Capital System-Component Purchases.) The original charge must be to this G/L. Do NOT charge to a 53 supply G/L and then do a journal entry to move it to 553820.
3. Create a spreadsheet to track all orders and send it to Becky and Jenny initially and monthly as components are purchased. The spreadsheet should include:
   • Description and total cost of equipment system.
   • Detail for each component:
     

     	For a committed item that has not been paid/posted - Run SAP Commitment Line Item Report using display variant (Layout) /ZPOREP and export the following fields to Excel:
     	- Cost Object	- PO Number (RefDocNo)
     	- Vendor Name (Name 1)	- Description (Name)
     	- Amount (ValCOArCur)
     	For an item that has been paid/posted - Run SAP Detail Line Item Report using display variant (Layout) /ZRDTL and export the following fields to Excel:
     	- Cost Object	- Document Type
     	- Document # (RefDocNo)	- Posting Date
     	- GL (Cost Element)	- Assignment
     	- PO Number (if applicable)	- Vendor (Document Header Text)
     	- Description (Name)	- Amount (ValCOArCur)

4. Send copies of invoices for all P-Card purchases and internal charges to Jenny.
5. When the system is assembled and operational, provide Jenny with the completion date for the system so it can be tagged. For information on tagging, see The Equipment Tagging Process.