Choose the Correct G/L for Equipment Purchase | Accounting

The single most important thing a department can do to make the asset management process run smoothly is to use the correct G/L when purchasing equipment. Use the table below to assign the correct G/L.

Scenario	Guidance
If the single item unit price of the item is <$5,000 If a purchase includes a trade-in, determine the G/L based on the original list price rather than the net purchase price after the trade-in allowance (e.g., if purchase price was only $4,000 after trade-in allowance but list price is ≥$5,000) use G/L from the capital listing.	Use G/L from the non-capital list
If the single item unit price of the item is ≥$5,000 Not all associated costs on capitalized equipment are included in the capitalized value. Costs related to the purchase of capitalized equipment should be itemized separately on the purchase order and the corresponding G/L should be coded as follows: Capitalized costs** include - the actual cost of the asset, software, shipping/freight, installation/labor (both internal and external charges) and insurance. Use capital G/L's. Non-capitalized costs* include - software licenses and user fees, warranty/maintenance agreements, consumable items (toner, syringes, etc.), supplies, training, and travel expenses for training/installation. Use non-capital G/L's. *Software: Regardless of the cost, software that is proprietary in nature and is necessary for a capital equipment purchase to be functional should be included in the capital cost of the equipment. Software must be purchased with the related capital equipment. If software is purchased separately later, it needs to be expensed on G/L 531952.	G/Ls for capital purchases G/Ls for non-capital purchases
Capital Lease - If the lease payments plus purchase price for a single item is <$5,000 Capital lease -- the ownership/title transfers to the University at the end of the lease.	Use G/L from the non-capital list
Capital Lease - If the lease payments plus purchase price for a single item is ≥$5,000 Capital lease - the ownership/title transfers to the University at the end of the lease.	Use G/L from the capital list (Select one with Lease/Purchase in the description)
Operating Lease Operating Lease - ownership is NOT transferred to the University and equipment is returned to the vendor at the end of the lease. Payments are for temporary use of equipment and therefore the equipment will not be tagged regardless of the amount of the total lease payments.	Use G/L in the 524XXX series
For upgrades ≥$5,000 to existing tagged/capitalized assets	Use G/L from the capital list
For repair of existing tagged/capitalized assets	Use appropriate repair/maintenance G/L (525xxx)
For purchase of replacement or spare parts/components for existing tagged/capitalized assets	Use G/L from the non-capital list
For components of fabricated equipment	Use G/L 553820