99-5  Obsolete

Capitalization Threshold Change
June 4, 1999

Effective July 1, 1999, the threshold amount for the capitalization of equipment will be raised from $1,000 to $5,000. This is the result of the federal government’s allowing universities to raise their capitalization threshold, and a detailed analysis by Indiana University to determine the optimum threshold for our institution. Because the current F&A (Indirect Cost) rates are set through June 30, 2002, equipment will be treated as follows in the three-year interim period:

These changes necessitate that the current object code classification of items under $5,000 follow the table below.

Cost

Object Code

Description

F&A Cost Applied

$0 – 999.99

4616

Computer Software < $1,000

YES

 

4910

Expendable Equipment <$1,000

YES

 

4908

Expendable Computer Equipment < $1,000

YES

$1,000 – 4999.99

5202

Non-capital Equipment

NO

 

5217

Non-capital Computer Equipment

NO

 

5218

Non-capital Software

NO

$5,000 or >

7XXX

appropriate capital object

NO

Discontinue use as of 7/1/99 on new purchases

5200

Expendable Equipment (prior to FY 2000)

YES

 

5215

Expendable Computer Equipment (prior to FY 2000)

YES