Capital Equipment Policy

I. Effective Date 

May 2024 

II. Last Revision Date 


III. Responsible Party 

 University Financial Services 

IV.  Scope

University employees responsible for purchasing, tracking, safeguarding, maintaining, disposing of, and reporting on capital assets. 

V. Purpose 

This policy defines capital equipment and outlines related procurement, accounting, and reporting requirements 

VI. Policy Statement 

Each University department is accountable for its own capital equipment including, but not limited to, safeguarding, maintaining, and tracking the location and status of individual items of equipment. Accurate and routine maintenance of property records is essential to safeguard assets, ensure compliance with federal regulations, support adequate insurance coverage, and promote efficient use of property.    

VII. Definitions 

Aggregate Capitalization 

Accounting convention that allows the capitalization of a group of items of tangible property costing less than $5,000 per unit, but $5,000 or more in the aggregate, that has a useful life of more than one year.   

Asset Custodian/Contact 

The individual, designated by the department head or chair, whose responsibilities include securing capital equipment, maintaining capital equipment records in a timely and accurate manner, and participating as needed in equipment inventories or capital equipment verifications. 

Betterment and Improvement 

Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that cost $5,000 or more and that materially increase their value or useful life. Repairs and maintenance are not betterments regardless of their cost. 

Capital Equipment 

An article of nonexpendable, not easily replaced, tangible property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. 

Capital Cost 

The net invoice price of the equipment plus expenditures necessary to place it into operation, including taxes, duty, transit insurance, freight, and installation. 


To record an expenditure as the cost of an asset, where the expenditure (such as refurbishing a machine to extend its useful life) yields benefits over a period longer than one year. 


Sales, transfers to other institutions, donation, loss, theft, surplus, scrap, use for parts, or any change of ownership. 

Fabricated Equipment 

A unique, identifiable, and discrete item that has a useful life of more than one year, and is made of material and components which cumulatively cost $5,000 or more. 


The regular activity needed to keep equipment in normal or expected operating condition; maintenance is not a capital cost. 


To restore normal production capacity and operation for expected service life of equipment; a repair does not extend the expected useful life or change the function of the equipment and so is not a capital cost. 

Sponsored Research Funds 

Research sponsored (funded) by an external organization managed by the Office of Sponsored Programs. 

VIII.  Policy 

A. Capital Equipment Acquistions 

  1. Capital equipment is purchased in compliance with standard purchasing policies and procedures as prescribed by the Office of Procurement and Payables. Capital equipment purchases must be acquired via a requisition unless prior approval is provided by the Office of Finance and Operations.   Donations of capital equipment must follow guidance and processes established by the Office of University Advancement.   The Office of the Controller must be notified of any transfers in of capital equipment, or other non-purchase acquisitions. 
  2. Costs capitalized with the equipment: 
    • Any initial modifications, attachments, accessories, or auxiliary apparatus necessary to make an item of capital equipment useable for its acquired purpose. 
    • Shipping charges, protective in-transit insurance, freight, and installation costs. 
    • Betterments or improvements as defined above. 
    • Cost that should NOT be capitalized with the equipment: 
    • Equipment repair costs.  
    • Separate warranty costs or maintenance contracts. 
    • Demolishing or dismantling costs. 
    • Spare or replacement parts. 
    • Training costs that can be separately identified 
  3. For equipment purchased from sponsored research funds, the Department Administrator and Principal Investigator (PI) are responsible for ensuring compliance with sponsor agreements.  Equipment purchases funded by a Sponsored Research Project within 90 days of award expiration are normally not allowable unless a justification is given by the PI, such as:
    • The purchase is necessary to complete the research. 
    • The PI is expecting the project to be extended. The department must have enough funding in a non-sponsored cost center to cover the cost of the capital expenditure if the sponsored funding does not materialize. 

The PI has sponsor approval to purchase equipment within 90 days of award expiration. 

B. Software 

Operating and communication software should be capitalized when purchased with hardware if the combined purchase meets the capital equipment threshold. Subsequent or separate purchases of software may be capitalized based on the Software Costs Policy.   

C. Aggregated Items 

The accounting convention called “initial complement of equipment” allows the capitalization of a large number of smaller items of tangible personal property which would have a useful life of more than one year. This might be applied when a portion of a building is being refurbished and some of the new furnishings cost less than $5,000 each, but more than $5,000 in the aggregate. Consult with the Office of the Controller to determine the appropriate treatment of these items. 

D. Fabricated Equipment 

Fabricated equipment constitutes equipment that cannot be acquired “off the shelf” but must be fabricated from individual components. For more information see Fabricated Equipment Policy.   

E.  Capital Equipment Records 

  1. All capital asset records must be properly maintained.  Asset Custodians are responsible for tagging capital equipment with a “Marymount Service Tag” and for updating the initial capital equipment record  with relevant information, including manufacturer, model number, serial number, location, and other details about the asset within 30 days of receipt.   Updates to this information, as well as changes to equipment condition, location, custodian, transfers, and disposals, must be entered within 30 days. 
  2. For capital equipment purchased with federal funds, a maintenance repair record must be kept if the asset is in use, and it should be attached to the equipment record. 
  3. A physical inventory of all capital equipment is conducted at least every two years.   The equipment custodian conducts the inventory by physically locating the equipment and updating the equipment record as needed.   The Office of the Controller will perform inventory validations. 

F.  Lost, Stolen, or Damaged Property and Equipment 

Departments must report all incidents resulting in equipment loss, damage, or destruction to the Department of Campus Safety and the Department of Risk Management. Departments must update the equipment record in the Workday Asset Record System. 

G. Disposal 

  1. All sales and other disposals of equipment must first be entered, approved and be coordinated through the University Equipment Disposal Program.   
  2. The University owns the property title to all equipment unless specifically stated otherwise in the applicable sponsored award terms and conditions. 
  3. The Controller’s office will notify Office of Sponsored Programs as needed for confirmation on certain disposals, transfers, etc. of equipment purchased on sponsored funds. Disposal of equipment involving the transfer to overseas locations, or to foreign persons in the United States, should be reviewed by Office of Sponsored Programs for compliance with US government export control regulations. The federal sponsor routinely reserves the right to assume title to capital equipment that is purchased with federal funds through final close-out of the award. In rare cases, the sponsor may request title after the award has been closed. Office of Sponsored Programs handles those requests on a case by case basis. 
  4. If a Principal Investigator transfers from the University to a new institution and wishes to transfer capital equipment items, the Department must enter the request and receive approval from Office of Research before the capital equipment transfer can take place. The Office of the Controller will assist in establishing fair market value of any equipment sold or transferred to another institution. 
  5. Any equipment that has come in contact with hazardous materials, has been noted as hazardous, or in any way requires decontamination or removal of hazardous components during disposal requires disposal through Facilities Physical Plant.