Capital Equipment

Revised:    June 19, 2013


Capital Equipment is defined as a unit of equipment (including all parts on the initial purchase) which costs $5000 or more. The cost of this equipment is depreciated over several years. Equipment costing under $5000 is called Operating Equipment and is not depreciated, but inventory is kept on selected units.

Each unit of equipment is assigned to an Equipment Custodian who is usually the Department Head or Operations Manager at the location of the equipment. These custodians are responsible to ensure that the equipment is properly utilized and accounted for until proper disposal. They are assisted by the Financial Services personnel who take an annual physical inventory of capital equipment and selected operating equipment.

Capital Equipment Category Code Determination Flowchart

Purchase Requisition Line Item Capitalization Flowchart


  1. Account custodians initiate Capital Equipment purchases using an electronic Purchase Requisition. This request is first forwarded to the Budget Officer for approval and then on to the Purchasing Department. Category 8400 in the account being charged must be used. If the account custodian wants to use the budgeted funds in 8400 to purchase a different type of equipment than the one originally approved in the budgeting process, he must complete a Capital Equipment Change Form, including his supervisor's signature, and send it to the Budget Officer. Otherwise, the purchase request will not be approved.
    All appropriated budget requests for Capital Equipment must be processed as separate items during the annual budget request cycle. The requests for appropriated Capital Equipment items are submitted with stewardship review materials.
    Each unit of equipment will have a bar-coded tag placed upon it when received.
  2. Account custodians initiate the purchase of Operating Equipment through the regular purchasing procedures. The purchasing requirements for Capital Equipment do not apply to Operating Equipment. There are two types of Operating Equipment.
    • Operating Equipment/Inventory (category 8300 must be used) Equipment which is placed in inventory are (1) all computers, monitors, and network printers, and (2) equipment costing between $500 and $5,000 which are readily susceptible to theft which generally have a value in a residential environment; such as electronic equipment, camera, musical instruments, and sewing machines. Each unit of equipment will have a bar-coded tag place upon it when received or installed.
    • Operating Equipment/Non-Inventory (use category 8350) Equipment which is not placed in inventory. Tags with only the name of the University can be placed on the equipment.
  3. All equipment in inventory (categories 8400 and 8300) will be tagged with a BYU-Idaho bar code number when received or installed. An inventory count will be made periodically by Financial Services using bar code scanning technology. Equipment custodians will be asked to account for any missing equipment.
  4. Disposal of Equipment and Relief of Accountability procedures are found on the web under Surplus sales. The website can be found here.