Non-capital equipment purchases charged to capital equipment accounts

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Greetings Certified Approver community! Important information has been posted about situations where non-capital equipment purchases have been charged to capital equipment accounts. It should be coming to you via email but I thought sharing via your CoP area would be useful for any new CAs coming on board in the future.

For those situations where non-capital equipment purchases are charged to capital equipment accounts:

During financial statement reporting periods (quarter 2 and year-end), Accounting Services reviews Capital Equipment purchases coded to the capital equipment asset accounts (850101 and 850104).

Any purchase that is identified as not belonging in capital equipment will be re-classified via a journal entry by Accounting Services to the non-capital equipment expense accounts (750xxx) using the same chartstring as the original purchase.

If the purchase was on a sponsored chartstring, and the 750xxx budget code has not been established, Accounting Services will work with the academic unit’s Certified Approver to have the necessary budget chartstring added to the project.

For purchases prior to fiscal year 2015, we have elected to re-class those purchases identified as non-capital at a central chartstring level rather than the detailed chartstring level.

Effective fiscal year 2015, the non-capital re-class entry will be recorded in March and November. Charges for items that are not considered to be capital and are on sponsored projects will be recorded to non-capital equipment and F&A, if applicable, will be charged according to the current business process.

The re-class entry is important to the institution because of the additional business processes and requirements that correspond with capital equipment (i.e., depreciation, financial reporting, and tracking of capital equipment).

These additional business processes and requirements are not necessary for non-capital equipment.