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Dartmouth College Equipment Capitalization Policy

Below is the complete capitalization policy, which can be found on DCIS.

Acquisition cost: The net invoice price of the equipment including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment operable. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included in determining the acquisition cost.

***Special Note***

No capital equipment may be purchased during the last 6 months on a sponsored research PTA Account.

Policy

Capital equipment at Dartmouth College is tangible personal property having a useful life of one year or more and an acquisition cost of $5,000 (threshold was increased from $2,500 to $5,000 effective July 1, 2008) or more per unit. All equipment meeting this definition should be recorded on the College's equipment inventory and should be tagged with a control number for tracking purposes.

Personal Computers

All personal computer system packages valued at $5,000 or more are to be recorded on the equipment inventory. PC system packages consist of a central processing unit (CPU), system software, and all accessories necessary to make the property operable. The value of computer monitors purchased with PC systems should be capitalized as part of the PC system. Monitors purchased as replacements or upgrades to existing systems are to be accounted for in the manner outlined below under 'Repairs, Replacements, and Upgrades.'

Software

Software is intangible property and is not considered capital equipment under this policy. The value of pre-loaded computer software may be included in the cost of the equipment recorded on the College's inventory when the cost of this software is not separately identified on the sales invoice. Major systems software valued at $25,000 or more may be capitalized for financial statement purposes. Please refer questions regarding capitalization of major systems software to the Controller's Office.

Accessory Equipment

The cost of an accessory purchased separately – after the equipment has been received and made operable – should not be added to the value of an item of capital equipment listed on the inventory. When an accessory meets all the criteria of capital equipment (i.e., it is tangible personal property having a useful life of one or more years and an acquisition cost of $5,000 or more), it should be treated as a separate item of capital equipment and assigned a Dartmouth College control number and recorded on the College's equipment inventory.

Repairs, Replacements, and Upgrades

Equipment repair, replacement, and upgrade costs will be capitalized only when these costs are $5,000 or more and they extend the useful life of the original piece of equipment by one year or more. When these costs are capitalized, the asset value and useful life of the original piece of equipment as recorded on the College's equipment inventory should be updated to reflect the new value and remaining useful life of the asset.

Donated Equipment

Equipment donated to the College by a third party is covered by this policy. For capitalization and inventory purposes, the recorded value of the donated equipment should be the fair market value of the equipment at the date of the gift. Generally, the fair market value of such an item of property is the price at which the item or a comparable item would be sold at retail, taking into consideration the age and condition of the property on the date of the gift.

Capitalized Manufactured Equipment

Capitalized manufactured equipment is equipment that is assembled or manufactured by the College using purchased materials, in-house machinery or tools and College labor. Manufactured equipment valued at $5,000 or more and having a useful life of one year or more shall be capitalized and recorded on the College's equipment inventory. Departments manufacturing equipment are responsible for determining the cost of the equipment. Additionally, it is the responsibility of the department to notify the Purchasing Department of the equipment's existence.

Contact Information: Fixed Assets Coordinator, Procurement Services

Last Updated: 12/16/10