Announcements

Announcements

Increase in Tangible Property Capitalization Threshold

 

In May 2011 the Florida Board of Governors approved BOG Regulations 9.001, 9.002, 9.003, and 9.0031 which increase the tangible property capitalization threshold.  Effective July 1, 2011 the capitalization threshold increases from $1,000 to $5,000 for tangible personal property and from $25 to $250 for library resources. The primary reason for the change is to reduce administrative costs and enhance overall stewardship and control of the university’s assets by eliminating the requirement to track relatively low valued items, so more attention and effort can be given to safeguarding higher valued items. Information on inventory requirements, purchasing, encumbrance of assets, the write off of assets, and sponsored research issues is provided below:

  1. Inventory Requirements – Effective July 1, 2011 only personal property items with a value or cost of $5,000 or more and Library resources with a value or cost of $250 or more,  and an original useful life of one year or more, shall be recorded in the university’s Asset Management system and inventoried by Finance & Accounting (F&A).
  2. Purchasing – Effective July 1, 2011 items purchased with a cost below $5,000 will be recorded as an operating expense and will not be capitalized. New expense accounts codes, purchasing categories, and guidance will be forthcoming.
  3. Assets encumbered with a cost between $1,000 and $5,000 prior to June 30, 2011 but received during fiscal year 2012 will be expensed and converted to the new expense account codes.
  4. All inventory items with a cost less than $5,000 that were received and capitalized prior to July 1, 2011 will be removed from the university’s Asset Management system. The list of assets that will be written off will be available on the F&A Web site. A notification will be sent when the information is available.
  5. Sponsored Research purchases of equipment from $1,000 – $5,000 on existing contracts or grants will not incur Facility and Administrative Rate (overhead) charges until their competitive renewal on or after July 1, 2012. All new grant proposals should continue using a $1,000 capitalization threshold until a new Facilities and Administrative Rate agreement is put into effect on July 1, 2012.

If you have additional questions, please contact Wilson Rosario, Associate Controller for General Accounting and Property at Wilson.Rosario@ucf.edu.

Revised 6/24/2011